When looking for financing to start, build, or grow your business you want to keep in mind not only the advantages of unsecured loans or unsecured business lines of credit but also “why” they should be on your list of funding options that can truly help you grow your business.
We’ve found over the years that it’s a good idea to start with the basic differences between loans and lines of credit. Read this for the 8 ways loans are different than lines of credit. The vast majority of small business owners are going to pick or prefer the unsecured business lines of credit over a loan product once they clearly understand the differences between the two.
Find Out Before You Apply: Is It Really an Unsecured Loan?
Let’s keep in mind one of the most confusing aspects of business loans when you’re looking for a loan online. It has to do with merchant cash advances and UCC liens. I mentioned it briefly here but most of the so-called “unsecured” business loans that are talked about online are not unsecured simply because the lenders will put a lien against your business in the form of a UCC. So the truly unsecured business loans tend to be from banks. The merchant cash advances are not “unsecured”, the hybrid bank statement loans also come with UCC liens so they are not “unsecured”, and peer to peer loans are personal loans (albeit they can be obtained for business purposes) so the options are limited plus there is more demand for the business lines of credit.
Most Business Owners Use Unsecured Lines of Credit Instead of Unsecured Loans
Since about 4 out of 5 small business owners use credit cards and business credit cards are one of the 3 types of unsecured business lines of credit they are an integral part of the discussion of how to properly obtain financing for your business. Depending on who you listen to or what statistics you believe there’s between 25-30 million small business owners in the United States. This means the issue of proper credit card usage impacts millions of small business owners.
If you want to know more about the 3 types of UBL’s then you’re in the right place – so get our FREE whitepaper about the 6 Benefits of using unsecured business funding and proper credit card usage… and once we get this darn blog to function properly I’ll share some more links with you about the 3 types of UBL’s.