28 Sep 2020, 13:47 — 4 min read
As your business grows, you would need additional funding to boost your operations. Whether it’s for upgrading equipment, sustaining cash flows, or fulfilling purchase orders, obtaining financing can fuel your business growth.
There are several loan options you can consider to access additional capital. Here are some types of loans that you can maximize to make your business more profitable:
Ideal for: Established business with strong financials and good credit standing
A collateral-based loan has lower interest rates and longer repayment terms since it’s backed by an asset such as cars or real estate that will serve as collateral.
This can be beneficial if you need a significant amount of money and cannot repay the loan in shorter terms.
However, if you default the loan, you can lose your hard-earned assets, which can affect your business massively if these are essential for your business operations.
You will hardly get approved if your assets are not worth enough for the amount of your loan. This is why a collateral-based loan is ideal for experienced business owners who have already established their business.
Ideal for: Startups in the early stage of the business or about to launch their business.
Unsecured loans do not require any collateral; thus, it has usually higher interest rates than secured business loans.
Since you don’t need to provide collateral with unsecured loans, lenders will usually look at the following:
Ideal for: Looking for short-term loans to meet your business’ growing needs
If you’re targeting to boost your business operations or looking for additional funds for payroll or inventory, availing a hassle-free business loan is the best option.
An Online lending marketplace like SeekCap allows you to shop for fast and easy business loans that best suits your needs.
Why avail business loans through SeekCap
Also read: How to take advantage of short-term loan to jumpstart your business
Business loan as an amortized short-term loan for micro to small and medium-sized enterprises comes with options of a 3 or 6-month term and loan amounts as high as Php 300,000. The Interest rate is at 2% per month or 24% per annum with zero processing fees.
Deciding which works best for your business out of the variety of financing options you have can determine your success, so you better understand what you’re getting into and choose wisely!
Image source: shutterstock.com
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