Many start-up businesses in the United States are small businesses and are often the ones that need capital the most. Entrepreneurs often look to SBA loans, credit cards, and crowdfunding in addition to secured and unsecured loans.
When starting your own business, it’s not always easy to get the funding you need to get off the ground. With the help of UFS, unsecured start-up business loans offer you the best chance of getting approved and receiving your money fast, with terms you can afford! We take the guessing out of the finance game and help ensure you are approved for the maximum amount of money possible with fair rates and the best terms available.
What are unsecured start-up loans?
When in need of capital, a small business will seek out lines of credit such as an unsecured business loan. An unsecured business loan can be used for various business expenses such as working capital, inventory or business expansion. There are also types of unsecured business loans that are made for specific scenarios. One type of unsecured business line of credit is an unsecured start-up business loan.
Start-up business loans can be used for any capital expense required to get a new company off the ground. Loans made for start-up businesses are commonly used for purchasing real estate, equipment, supplies, inventory, or to satisfy other expenses.
Unlike a secured loan or line of credit, an unsecured business loan for a start-up does not require collateral. This means you can take out a start-up business loan without risking your hard-earned assets of those of your start-up business.
Benefits of unsecured business start-up loans and lines of credit
Features of a start-up loan
Advantages of using an unsecured business loan for a start-up
A unique aspect of unsecured start-up business loans is that they don’t require the business owner to give up equity in their company. A borrower isn’t required to put up collateral, allowing them to get the capital they need to start their business without risking business or personal assets.
In addition to requiring no collateral, another advantage to unsecured start-up business loans is their flexibility. Unsecured start-up loans can be used for almost any expense related to starting a new company without requiring business financials or other documentation. Some common uses of unsecured business loans for start-ups include working capital, inventory, and advertising expenses.
Unsecured start-up loan requirements
Unlike a secured loan, applying for an unsecured business loan requires no collateral to qualify for the loan. This means that start-up business loan lenders use other methods to qualify a borrower for start-up loans.
A borrower must submit an application and pay stubs or tax returns; what kind of income verification required is dependent on the lender. The start-up loan lender then reviews the application using several criteria to determine whether they will lend the borrower the requested loan amount.
Unsecured start-up business loan FAQs
Unsecured business start-up loans can be used for almost any start-up expense! Start-up business loans are often used to cover expenses such as accounts receivable, inventory, and working capital.
The interest rate for unsecured start-up loans depends on several factors, including the individual lender’s credit policies and the overall economy. UFS can help its clients get low-interest business start-up loans at rates as low as 5.99% with qualifying credit.
The main difference between secured and unsecured lines of credit is collateral requirements. A secured loan will require a borrower to put up collateral while an unsecured loan will not. As a result, a secured loan presents less financial risk to the lender, which allows them to offer higher loan amounts. However, a borrower with good credit can often receive an unsecured loan on terms that are comparable, if not better, than SBA and other business loans.