Monday, February 18, 2013

Are Secured Business Loans Right For Me?

When you own your own business you are going to come to a point where you find yourself needing more money. Many start up businesses will need a loan so that they can take their business to the next level. There are two basic types of loans you will need to consider; unsecured and Secured Business Loans. Unsecured loans can be easier to obtain because they don't require any personal collateral.

The trade off for this is that the interest rate is very high. Unsecured loans are much riskier for the bank and so they are going to end up charging a high amount of interest to the business owner. startup business financing bring much less risk to the bank because they have a way to recoup their money if you should default on the loan. The benefit of this type of loan is that the interest rate is much lower.

Equipment leasing is another type of start up business financing. If you are in need of equipment but not able for some reason to obtain a business loan, you can always lease equipment that you need. The cost is typically much higher, but it will be easier to obtain the equipment and you won't be responsible for buying your own.

The process works by renting equipment at a low monthly rate. After your business is done with the equipment, you can either buy it at fair market value or return it to the lender. This is a great option for start up businesses that have not already generated a lot of revenue.

Equipment leasing is available for any type of business. Almost any type of equipment for any type of business is available to be leased. In most cases, a company leasing equipment is the same company that sells the equipment. Be sure to get a couple of different quotes so that you are getting the best monthly rate on your lease.

The type of loan you need really depends on how new your company is. A Secured Business Loan is almost always the best for a start up business because you won't have to worry about not being able to pay back a loan. Secured loans do not depend on good credit ratings and will allow you to catch your breath and get your company going.