Non-SBA Loan Alternatives for Small Businesses

Many businesses get their start with the help of loans from the Small Business Administration. But this approach to funding is not always the best option.

It can be difficult to obtain an SBA loan. SBA loans have a long application process. And, to qualify for SBA loans, both the borrower and the business itself need to qualify.

Due to the eligibility requirements and strict business timeline that SBA loans require, some business owners search for SBA loan alternatives, such as unsecured business loans.

Unsecured business loans have flexible loan requirements. In addition, unsecured business loans are smaller than SBA loans, ideal for business owners searching for a lower loan amount. On average, the size of an SBA loan was over $400k in 2018.

Businesses can secure a wide variety of non-SBA business loans. From start-up loans for a new business to business loans to fund an expansion, there are many options to consider. In this article, we examine several non-SBA business loans that Unsecured Funding Source (UFS) can help you get. Keep reading to learn more about SBA loan alternatives such as personal, start-up, and business loans.

Non-SBA Loan Alternatives for Small Businesses

UFS offers three primary types of non-SBA business loans. Each option features huge advantages for business owners. Keep reading to learn more about each loan option.

Unsecured Personal Loans

Unsecured personal loans are loans made for personal use. They are not secured against your assets. This type of loan is borrowed in a lump sum and paid back over time in fixed installments. There are many advantages to unsecured personal loans for businesses, such as:

  • They are 100% unsecured
  • There’s no need to risk your home or assets
  • They can be approved in as little as 48 hours
  • There’s an easy online application

These loans do not require collateral, which is a major benefit for borrowers. Unsecured personal loans aren’t secured against any personal assets. So, borrowers won’t risk as much as they do with other loans.

Lenders use other means to determine whether a borrower qualifies for an unsecured loan compared to a secured loan. One factor that lenders use to qualify a borrower is credit score. Borrowers with good credit are more likely to receive this type of loan.

This type of loan is highly flexible. Unsecured personal loans are often used for a variety of purposes. Borrowers can also use this money to cover a range of small business expenses.

Unsecured Business Loans

When businesses grow, they need more capital. Unsecured business loans provide a quick and simple way to secure funding. This type of loan is available at affordable rates. The main purpose of these loans is to cover the financial needs of small businesses.

Like other unsecured loans, collateral is not required for loan approval. Instead, the borrower uses their financial information to secure approval. So, a borrower may have to provide paystubs and/or two years’ worth of tax returns to verify their income when applying for unsecured loans.

Like any other unsecured funding, a borrower may use unsecured business loans for almost any type of business expense. Some common uses include payroll, advertising, and expansion.

Unsecured Start-up Loans

For entrepreneurs seeking non-SBA business loans, unsecured start-up loans can help to fund a new enterprise. The purpose of these loans is covering the costs associated with new business endeavors. This can include starting an entirely new business or purchasing a franchise.

Other common applications for unsecured start-up loans include purchasing:

  • Equipment
  • Real estate
  • Supplies
  • Inventory
  • And more

Because they are unsecured, these non-SBA business loans need no collateral either. Borrowers do not need to risk their personal assets to secure the money they need to start a business. To qualify, borrowers must have a good credit history (a credit score of 720 or above is best). It is also recommended that borrowers have a debt-to-income ratio below 40%.

Find the Right Funding for Your Business

The complex and time-consuming process and strict requirements of SBA business loans are not right for everyone. Unsecured loans provide an excellent alternative funding source for entrepreneurs since qualifying for them is simple.

In the world of business loans, Unsecured Funding Source stands apart. UFS has over fifteen years of operational experience providing clients with non-collateralized loans. The experienced advisors at UFS guide borrowers through the lending process step-by-step. With UFS, borrowers can easily navigate the borrowing process and receive funding in as little as two to five business days!

Ready to find the right funding for your business?
Contact Unsecured Funding Source and discover the best SBA alternative loans for your needs.

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