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Posted by Michael Noble - 16 September, 2021

What to Expect when Applying for an Unsecured Business Loan?

Small business loans are essential to the early success of a business. In this delicate stage of growth, an influx of much-needed cash can help to steady the ship and guide the company toward sustainable growth.

But what's the process like? Many small business owners are nervous about applying for unsecured business funding, given that it seems like a logistical nightmare. Forms and finances take a lot of attention, when it needs to really be applied to your business. 

In this post we are going to take a closer look at the process and what you can expect after making your application. 

First, though, let's take a closer look at why a small business might want to apply for an unsecured business loan.

 Unsecured business loan


An Important Injection of Cash

This flow of cash can be used for a number of reasons. Some businesses will want to purchase the real estate that they need to get their operations off the ground, while others might need to purchase special equipment that is required for them to conduct their business.


If the small business is selling items, then it will need to purchase a range of inventory and big discounts can be secured by purchasing in bulk and at certain times of the year. Working capital is also important, and it can help small businesses to perform day-to-day tasks that keep their business running smoothly.


Making the Application

Making an application for an unsecured business loan can be nerve-racking and you may not know where to even start. Here's a quick overview and what you can expect at each stage of the process.


Collecting Documents

Before choosing a provider, you'll want to get your key documents in order. This will mean collating all of your important business documents and records. Equipped with all of this critical information, you'll find that it's simple to cater it and send it out to a variety of appropriate lenders.


You'll find that the requirements vary greatly from one provider to the next, so you'll want to make sure that you're fulfilling the specific needs of each. In order to ensure that you do this, you may want to consider enlisting the help of a finance professional.

B2B Credit DSO payment


Choosing a Program

Once you have everything in order, you can begin to investigate which program might be the best for your business. There are lots of programs out there which vary greatly in the terms that they offer. You'll find different rates of interest and amounts of credit, and these will vary according to the state of your business and your needs.


Familiarizing yourself with the variety of programs and vocabulary out there is a great first step and will help to ensure that once you find the appropriate lender, you'll be in a position to negotiate and talk with confidence.


Choosing a Lender

Choosing a lender is difficult. This business is going to be responsible for setting the credit requirements and determining whether or not your business is eligible for the program that you requested.


You'll find that there is a limited network of lenders, so you will want to carefully consider each and the pros and cons that they offer to your business. you'll want to find the answers to these key questions before making your decision:


  • Is customer service great?
  • How much can you borrow?
  • Do you quality?
  • What are the interest rates?
  • Is a down payment required?
  • How much collateral is needed?
  • How long does the process take?


You'll also notice that some lenders are more rigorous than others in terms of their credit history requirements. We understand that many small businesses go through struggles in their early days, so you'll want to find a lender that is sympathetic to the plight of small businesses. These lenders will most typically look at your financial performance rather than your credit history, giving them a more accurate view into the eligibility of your business.


Making the Application

This process will vary from one lender to the next. Some lenders have an exacting process which takes many hours or even days, while some others will offer a more pleasant and stress-free experience. In fact, the application process should be considered when you're choosing a lender: investing too much time in a doomed application can harm your business.


Receiving the Answer

The answer that you receive will vary depending on the lender that you have chosen. Some lenders offer more supportive terms to small businesses than others - if you've made the right choice of lender, you'll find that they will quickly get back to you with an answer.


From here, it's a matter of receiving the funding. Again, some lenders are better than others when it comes to providing the unsecured business loan. Some will provide the funding within a matter of days to help your small business get off the ground.


Make the Right Choice

Essentially, the experience you'll have will vary according to the lender that you go with. This is why it's so important to diligently and completely assess the suitability of lenders before making the leap.


What to expect when applying for an unsecured loan:

  1. An Important Injection of Cash
  2. Collecting Documents
  3. Choosing a Lender
  4. Make the Right Choice

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Topics: Finance, Credit, Payments

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