Secured Business Loans


Today, we will focus on secured business loans. Of all the different types of financing that is available to you for the continued development, expansion, and growth of your entrepreneurial venture the usage of secured business loans is easiest way to obtain the financing that you need in order to expand or launch your venture. This, is primarily due to the fact, that banks as well as financial institutions love having an appropriate amount of collateral in place that secures the financing that you need in order for you to further your business operations. As for our discussion relating to unsecured business loans, secured business loans are far easier to receive and they carry much more favorable terms than their unsecured counterparts due to the fact that the risks associated with it this type of financing is substantially less. Again, in the unfortunate event that your business does not go as planned and you close your company, the bank or finance company that provided you with a secured business loan will be able to recoup their investment from the sale of the property that was used as collateral for the secured business loan. Time and time again, we will continue to focus our efforts as it pertains to obtaining financing for your business through discussions relating to secured business loans and how you can effectively put up a significant amount of collateral so that you become an excellent candidate for receiving this type of funding. Again, when you are seeking secured business loans, it is important to not only have the appropriate business plan in place that showcases how you intend to repay the principal and interest payments that will be due on the obligation that you are undertaking but also the very clearly showcase the collateral that will be used for the secured credit facility appears seeking. Typically, this can be done with a new business plan by showcasing the specific pieces of collateral that will be used secure your business financing. Most importantly, the collateral that is appropriate for a secured business loan include purchasing real estate, furniture, fixtures, and other equipment, as well as other business assets that can be quickly  sold to a third party in the event that your business does not work out as planned. As our some of our previous articles, you should always plan on the contingency that your business may not work out as you anticipated and that ultimately you may need to close your doors as it pertains to your business operations. However, by seeking secured business loans - you will have a clear understanding of the risks that you're taking concurrently providing your business with a lower interest rate for the capital that you need in order to launch or expand your company use these activities.

 

From the standpoint of banks and other financial institutions, secured business loans are one of the least risky ways to provide financing for small business clients as well as medium-sized corporations. Again, this speaks to the fact that the loan is collateralized by a tangible asset that can be sold to a third party at any given time in the event of a business loan default or foreclosure. As part of business plan as it pertains to the acquisition of secured business loans should always have contingency plans in place should your business spelling out to a bank that is willing to grant your firm a secured business loan so that they can clearly understand the risks that are associated with your business and how the financial situation can wreak their investment should you need to close your business for any reason. Although it seems contrary to the concept of developing a business plan as it pertains to the success of your business, as it relates to secured business loans, having the business plan focus on the specific risks and liabilities that come with operating your specific company will further the banks of trust in you as it takes pertains to making inappropriate lending decision. This cannot be stressed enough, and we strongly recommend that you review our articles as it pertains to the development of a business plan that not only focuses on the success of your business, how you intend to repay secured business loans, as well as the downside that come from your ongoing business activities. Of course, as we stated time and time again, if any of the terminology we are discussing through these articles as it pertains to secured business loans is foreign to you strongly recommend that you work closely with a qualified financial business consultant for certified public accountant that can assist you not only in determining which former finance is most appropriate for your business, you can also assist you with determining what type of interest rates that your business can afford as it relates to secured business credit facilities.

 

For your business venture, especially if your company is brand-new. Unlike our discussions relating to equipment finance or unsecured business loans, secured business loans are most appropriate for new entrepreneurs that have not yet developed a proven track record of it as it relates to operating owned business ventures. As we stated above, having a secured credit facility with provide a greater assurance to the financials to show that you're working with to provide you with a capital you need simply due to the fact that the risks are substantially lower than that of a working capital credit facility or other form of unsecured credit facility. This will be one of the ongoing themes as we discuss the acquisition of business financing for new, developing, and expanding his business ventures.

 

One of the ways that you can acquire secured business loans is by working with a commercial loan broker that specializes in placing capital on the half of entrepreneurs and expanding companies. These firms, of course, generate substantial success fees if they are able to please the secured business credit facilities that you are seeking. However, if you decide to acquire secured business loans through a commercial loan broker then you should anticipate that the fees were are justified their ability to find capital on your behalf and they should be lower than if they were seeking unsecured credit facility. And then, as you progress through your search for capital, especially as it relates to secured business loans, should always be aware that the more complex the financing you need the higher the fees will be should you decide to use a commercial loan broker as it pertains to obtaining financing that you are seeking. As such, the fees from as it applies to working with a commercial broker for the acquisition of secured business loans is that you'll need to pay an amount equal to 2% to 3% of the face value of the loan when you are seeking this specific type of funding. In cases where you're seeking unsecured business loans were working capital facilities the anticipate that a successfully invested capital range from 3% to 6% depending on your credit and other complexities that relate to obtaining that type of financing.

 

If you decide to seek secured business loans in your behalf then it will be in your best interest to first speak with your local banker about what types of interest rates are applicable to this specific type of funding. Additionally, you should also question your banker as to what the appropriate credit score is as it relates to your personal credit report. As with any type of small business financing, again, you will need to provide a financial institution with three years worth of tax returns as well is your personal credit report in order to secure more any type of business financing in today's economic climate. Additionally, if your business is already in operation than you may be required to show what the previous three years of your business is tax returns as well as your business is credit score as part of your overall loan package. For secured business loans, the business plan for your company is less important than a collateral report that will be required as relates to how you intend to use the funds. In many instances, when you are seeking secured business loans you very clearly delineate the financial interest to show exactly what items you will be purchasing one of the financing that you intend to receive. In order to best secure financing, we strongly recommend that you find the specific pieces of equipment, real estate, or other tangible assets that will be used as a collateral for your secured business loan. If you are having difficulty determining which pieces of equipment or other tangible assets to secure the loan then you may want to aggregate these specific categories of secured property that you intend to acquire was the financing proceeds. Again, if you're having trouble developing a collateral plan then you can work with a certified public accountant for business valuation firm that will assist you in developing the appropriate documentation that we were quite heard in order to obtain secured business loans.

 

In regards to the interest rate that you can anticipate, via the acquisition of secured business loans, you can expect that for a new or developing business that the interest rate will range anywhere from 3% to 6% over the prevailing prime interest rate. If you are an established business, and you're seeking secured business loans, then you can anticipate that the interest rate that you will be charged for your specific credit facility will range from 1% to 3% over the prime rate. However, it should be noted that your business and you personally may have issues pertaining to your credit then the interest rates regarding these loans can be substantially higher than was previously stated. For instance, if you have a very quick need of developing business that requires new equipment and you need a secured business loan in order to further expand the company then you can expect that the interest rate would be slightly above time provided that your credit is appropriate. However, if your credit score is not very good shape than you can anticipate that you can receive a loan that may feature an interest rate that is 7% to 10% above the prevailing prime interest rate. Prior to even applying for secured business loans should very clearly discuss with your banker your personal financial situation as well as your business financial situation so that an appropriate determination can be made immediately as to whether or not you'll receive the financing seeking as well as determining the expected costs that are seceded with perceiving the capital that you are seeking. If your banker immediately tells you that you are not a good candidate for traditional bank loan financing, as it relates to secured business loans, then you may want to enlist the services of a commercial loan broker as we discussed above as well as through some of our previous articles as it relates to working with intermediaries that seek capital on behalf of their clients. Of course, any time that you're working with the bank for business intermediary, we always recommend that you were to meet vice of a certified public accountant so that appropriate decisions can be made as a relates to the ongoing expenses of any credit obligation that you're looking to undertake.

 

In conclusion, as it relates to this specific discussion regarding the issues that pertain to secured business loans – we intend to continue our series of articles relating to general business financing. Additionally, it should be noted that secured business loans, having the lowest interest rates applicable for business financing, are not the only method of receiving the capital you need to develop and expand your business operations. If the capital you are seeking is somewhat of a unsecured nature then you may very well qualify for a small business administration loan that you can use in order to develop the entrepreneurial venture wall receiving the same interest rate if it were a secured business. As we discussed earlier small business administration provides a substantial guarantee to the financial institution that you're working that so that you can not only obtain the financing is you need but also the fact that the costs associated with the interest payments that you'll need to make all reasonable and on par with the general market fees associated with this specific type of financing that you're seeking. If you are seeking traditional secured business loans then he may be a very good position to receive interest rate that is on par with the market rate for other small businesses. However, if you're seeking financing that again, has an unsecured portion, then you may want to look into it a number of the small business administration loan programs that are available to you as a small business or medium-size business owner. Of course, we will continue to thoroughly discuss these issues as we progress through the series of articles that we are developing as it pertains to secured business loans as well as unsecured business credit facilities. Thank you again for checking out our website and for taking a look at the articles that we have developed as it relates to business planning and business financing. We will continue to provide you with new and insightful information as it relates to your ongoing financing activities as time progresses.


Testimonials  Complete Business Plans  Raise Capital  FAQ  Articles and Blog  Contact Us  Terms of Use and Privacy Policy