When should I use an unsecured business loan for my business?
It’s a good question to ask, as some loans can impact business in ways owners don’t expect.
Unsecured business funding can impact cash flow, and in turn, the viability of a business in a few different ways. One way is that unsecured business loans are usually for a shorter term.
So if you need to repay a loan that is as big as your average monthly turnover in 12 or 24 months with weekly or fortnightly direct debits coming out of your business account, that can put a large cashflow strain on some businesses.
Where an unsecured loan can be really beneficial is when you have an opportunity. An unsecured loan can provide an injection of capital to take advantage of an opportunity that is going to bring your business a return in the foreseeable future – a return significant enough to payout the unsecured loan and bring profit to your business.
An unsecured loan can become a weight around your neck but when used the right way, unsecured business funding can give your business the capital it needs fast to take advantage of opportunity.
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