The term business seems so simple. But, do you know how much efforts are required to start and establish a business. A well-established business showcases the hardship, dedication and capital investment made by an entrepreneur. Are you one of them who want to rule the world and are tired of the orders of your boss? If yes, then it’s great; most of us want the same. But, whenever you evaluate the investment needed, it made you back out from the business plan. No need to despair any long; now you can borrow a secured business loan to secure your business dream.
Business loan come in two main forms – secured business loan and unsecured business loan. Now, you would think why I suggested you secured loan despite of other loan alternatives available. There is a strong reason behind it, I am here to suggest you the best option and that’s what I did. A secured business loan requires a borrower to put collateral against the loan borrowed. Collateral, which a borrower needs to keep, can be in the form of a house, car, savings account or any other property owned by the borrower.
A secured business loan is a package of everything perfect. It offers a loan for a longer term, which can be extended up to 30 years in some cases. A borrower can borrow a secured business loan for a larger amount which can range between 25,000 to 10 million depending on the loan term and credit rating.
A borrower can enjoy the benefit of flexible repayment options offered by secured loan. One can choose a fixed rate loan or a flexible rate loan. A fixed rate loan implies that a borrower has to pay fixed monthly installment. People who are sure that they will be able to pay fixed monthly installment each month, can opt for this option. Flexible loans requires a borrower to pay monthly loan as per their convenience. Borrowers can make overpayment, underpayment and can enjoy payment holiday too.
If you want to start a new business, then you need to present a business plan. Your business plan will help in determining your possibility of getting the loan. Thus, a business plan is needed to be planned thoroughly. Don’t keep any secret; disclose every minute detail to the lender. An ideal business plan contains each and every detail of the business – product, identifying competitors existing in the market; your business strategy, your future plans, financial forecasts and what are the risks involved in the business.
Entrepreneurs who have an established business may need to submit few documents such as a copy of business tax returns, balance sheet, profit and loss statement and other financial statements. These statements will work as evidence that the borrower is making profits or losses and whether the profits are large enough to cover the monthly payments or not. You need to make a business profile giving description of the annual sales, length of time in business and ownership whether a business is in the form of proprietorship, partnership or a private limited company.
Traditional lenders such as banks and financial institutions can be approached for borrowing a secured business loan. It won’t be wrong if I state that twenty first century is an era of technology. Every one wants to become computer savvy. An important contribution of the rapid mounting technology is the invention of internet. Internet has broadened the growth scope of the finance market with the entry of online lenders. Online lenders offer fast online loan with ease. A borrower can access online lenders by browsing loan providing websites. Online lenders give the convenience of borrowing loan. Online application form are available at most of the websites, a borrower needs to fill it. Online lenders approach the loan applicants with the most appropriate loan option.
There is one more area lenders focus on; this is credit status of the borrower. Higher the credit score, more is the possibility of getting a secured business loan at better rates, and that too for a longer term. Poor credit score cannot stop you from getting a secured business loan. You just need to have collateral to put as a security to borrow the loan.
Though, there are various benefits attached with a secured business loan. However, as a coin has two sides same is the case with a secured business loan there is risk involved regarding the repossession of the collateral kept as a security if one fails to repay the loan. There is risk involved in every deal, running a business also involves risk but a wise man knows how to manage the situation and accept the challenge. If you want to make a mark for yourself in the business world then you would definitely accept this challenge and will bear the risk to prove your capability and entrepreneur skills.