If there is one universal commonality when it comes to running a business, it is that you need to have cash available to make some advancements, improvements, and to help your business continue on a growth trajectory.
Unfortunately, having that cash available is not always the easiest thing in the world. Usually, it is tied up in other areas of the business and not readily accessible for a growth opportunity. There can also be times where business just isn’t as good as you’d like it to be, leading to a shortage of cash flow at a critical time.
Secured Business Loans
This is where something like secured business loans can be so beneficial to businesses of all sizes. Loans, in general, are meant to provide liquid cash for your business on short notice. That cash can be used for a litany of different things: an essential construction project related to the business, purchasing inventory, making structural changes to the business, and more.
It is worth saying that these loans are definitely not something that should be done to save a business that is on the verge of collapse. There are many other issues that led to that point; taking out a loan can only make the load that much heavier and difficult to recover from.
Secured Versus Unsecured
Perhaps you have never taken out a loan before and you have heard the terms “secured” and “unsecured” when it comes to loans. Going into the situation without knowing the pros and cons of each can lead to more questions and uncertainty.
Unsecured loans are good in that they do not require any form of collateral or security from the buyer. This means you are not putting anything of value up to secure the loan, which is hugely beneficial if your business winds up failing.
While you can get your money in a very quick turnaround – sometimes same day – there are definitely caveats to going the unsecured route. One is that your odds for approval will depend solely on the application details. Maybe there’s a credit requirement; with an unsecured loan, you can run the risk of not meeting that requirement.
With secured loans, you are required to put up collateral to secure the loan. This can be assets, property, or anything the bank deems valuable. This is scary because, if the business fails, that asset can be lost. But you also have better odds of approval, can get larger amounts, and get lower interest rates.
Getting a secured business loan for your small business can be the step between growth and failure for your business. Don’t let a cash shortage stop your business from growing.