Secured Business Funding

May 10, 2017 by Craig Upton

Raising the required capital to start and develop a new business is often the dictionary definition of a catch-22 situation.

In terms of available lenders, there are dozens of major banks, building societies and financial institutions that are happy to loan cash to the required amount.  Unfortunately, they only tend to be willing to hand over a penny if you can already prove your capacity (and that of your business) to pay it back. Which can of course be difficult, if your business either doesn’t exist or is only just getting off the ground.

You need money to get your business where you want it to be, but you need to get your business to a certain position before most will even consider lending you the required capital. Suffice to say, a difficult and frustrating situation so many business owners and entrepreneurs are probably all-too familiar with.

An Accessible Alternative

This is just one of the reasons…albeit a big one…why secured business funding has the potential to represent a far more accessible and beneficial alternative. In terms of simply getting hold of the cash you need in the first place, a secured loan could offer the kind of flexibility and affordability no conventional loan comes close to.

The key difference with a secured business funding is the way in which the loan is secured by property or assets of some kind or another. With conventional loans, you essentially need to prove your current financial situation, to such an extent as to prove your capacity to pay back the loan. With a secured loan, this isn’t necessary at all – you simply need the required collateral, in accordance with the value of the loan itself.

This way, current financial circumstances and even your future financial outlook are superfluous considerations. This in turn significantly simplifies the application process, meaning that regardless of how much capital is required, it can be obtained far more quickly and easily. Not only this, but it is often true to say that secured business funding is offered with considerably lower rates of interest and overall borrowing fees than comparable conventional loans. Which again largely comes down to the simplicity of the deal – you put up the required collateral, they provide you with the capital and repayment agreements are reached accordingly.

Speaking of which, there can also be a great deal more flexibility in terms of repayment with secured loans. Along with the usual method of paying back a specified amount on a monthly basis, it is also possible to pay larger sums on a less frequent basis, or perhaps something of a lump sum inclusive of all agreed borrowing charges at a later date.

Even if the applicant in question doesn’t have the most outstanding credit history, this rarely tends to be an issue when it comes to secured loans. The only thing needed to facilitate the loan is the required collateral – the rest rarely comes into the equation.

Time savings, low costs, simplicity and flexible repayment options – just four are the many benefits that accompany secured business funding, over and above the traditional alternative.