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:

1. Collateral-based loans

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.

2. Unsecured loans

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:

• Your credit history
• Your credit score
• Your financials and bank statements
   

• Lending money from your family or friends. Raising money from your family or friends can be a form of unsecured loan. It’s the quickest way to get additional capital or fund for your business. But this comes with risk as well, especially if you’re not cautious enough.
  
  To avoid wrecking personal relationship, it’s best to come up with repayment terms or contract that states interest or fee and timeline of payment. Regardless of your relationship, lending money should be done in a professional way.
  
  

• Using credit card. When you haven’t established your business presence yet, you can utilize a credit card to finance your business, a convenient source of revolving credit. It gives you time to pay your purchases where you can fill in any cash flow gaps.

3. Fast and hassle-free business loans

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

• Loan application requires minimal documentation
• Get multiple offers from different lenders to fulfill your credit needs
• You get a response regarding your application within only hours of applying.
• Disbursement of loan is as fast as three banking days.
   

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!

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