{"id":2633,"date":"2020-03-20T20:12:19","date_gmt":"2020-03-20T20:12:19","guid":{"rendered":"http:\/\/localhost\/2020\/swoopMW20\/?post_type=knowledge-hub&#038;p=2633"},"modified":"2024-08-22T18:34:32","modified_gmt":"2024-08-22T18:34:32","slug":"unsecured-loan","status":"publish","type":"knowledge-hub","link":"https:\/\/swoopfunding.com\/ca\/knowledge-hub\/unsecured-loan\/","title":{"rendered":"Unsecured loan"},"content":{"rendered":"\n <div class=\"faq-accordion faq-accordion597\">\n <div class=\"card\">\n <div class=\"card-header\" id=\"heading0597\">\n <h5 class=\"mb-0\">\n <a class=\"btn btn-link\" data-toggle=\"collapse\" data-target=\"#collapse0597\" aria-expanded=\"true\" aria-controls=\"collapse0\">\n What is an unsecured loan? <\/a>\n <\/h5>\n <\/div>\n\n <div id=\"collapse0597\" class=\"collapse show\" aria-labelledby=\"heading0\" data-parent=\".faq-accordion597\">\n <div class=\"card-body\">\n <p>An <a href=\"https:\/\/swoopfunding.com\/ca\/loans\/unsecured-business-loans\/\">unsecured business loan<\/a> is a loan that doesn\u2019t require you to offer security (in contrast to a <a href=\"https:\/\/swoopfunding.com\/ca\/loans\/secured-business-loans\/\">secured business loan<\/a>). As these loans are not secured by collateral (assets to be sold in forfeiture of debt), they are likely to charge higher interest rates as the lender assumes a higher degree of risk. Also, the borrower is required to show an excellent credit history and cash flow projection.<\/p>\n<p>The loan amount could be from as little as $1,000 to $2,500, and the term rates up to 5 years.<\/p>\n <\/div>\n <\/div>\n <\/div>\n <div class=\"card\">\n <div class=\"card-header\" id=\"heading1597\">\n <h5 class=\"mb-0\">\n <a class=\"btn btn-link\" data-toggle=\"collapse\" data-target=\"#collapse1597\" aria-expanded=\"true\" aria-controls=\"collapse1\">\n Why choose an unsecured loan? <\/a>\n <\/h5>\n <\/div>\n\n <div id=\"collapse1597\" class=\"collapse \" aria-labelledby=\"heading1\" data-parent=\".faq-accordion597\">\n <div class=\"card-body\">\n <p>Here are three scenarios where you might look at taking out an unsecured business loan:<\/p>\n<ul>\n<li>you\u2019re looking to borrow, but you don\u2019t have much in terms of tangible assets (e.g. you rent an office rather than owning commercial property)<\/li>\n<li>you do have some valuable assets but you don\u2019t want to borrow more than your assets are worth<\/li>\n<li>you\u2019d prefer not to offer specific assets as security<\/li>\n<\/ul>\n<p>You might want to consider an unsecured loan if you want to borrow more than the value of your assets, if you would prefer not to offer security, or if you\u2019re a fast-growing business that needs finance quickly.<\/p>\n <\/div>\n <\/div>\n <\/div>\n <div class=\"card\">\n <div class=\"card-header\" id=\"heading2597\">\n <h5 class=\"mb-0\">\n <a class=\"btn btn-link\" data-toggle=\"collapse\" data-target=\"#collapse2597\" aria-expanded=\"true\" aria-controls=\"collapse2\">\n Pros and Cons of an unsecured loan <\/a>\n <\/h5>\n <\/div>\n\n <div id=\"collapse2597\" class=\"collapse \" aria-labelledby=\"heading2\" data-parent=\".faq-accordion597\">\n <div class=\"card-body\">\n <p>On the plus side, <a href=\"https:\/\/swoopfunding.com\/ca\/loans\/unsecured-business-loans\/\">unsecured business loans<\/a> are usually simpler and quicker to arrange than <a href=\"https:\/\/swoopfunding.com\/ca\/loans\/secured-business-loans\/\">secured loans<\/a> because there is no need for the lender to inspect or value any assets.<\/p>\n<p>However, in the absence of any security, the lender cares much more about your business\u2019s profile \u2013 and may also look at your personal credit history and personal assets. After all, they will need assurance that you can repay the loan if things don\u2019t go to plan. Unsecured lending is usually more expensive than secured lending because there\u2019s more risk for the lender.<\/p>\n<p>For an unsecured loan, the lender may look at:<\/p>\n<ul>\n<li>revenue and profit (vs. loan amount)<\/li>\n<li>bank statements<\/li>\n<li>filed accounts<\/li>\n<li>trading history<\/li>\n<li>payment history (e.g. late payments, county court judgments)<\/li>\n<li>directors\u2019 histories (lenders may ask for a personal guarantee)<\/li>\n<li>forecasts and business plans<\/li>\n<li>your clients\/customers<\/li>\n<\/ul>\n <\/div>\n <\/div>\n <\/div>\n <div class=\"card\">\n <div class=\"card-header\" id=\"heading3597\">\n <h5 class=\"mb-0\">\n <a class=\"btn btn-link\" data-toggle=\"collapse\" data-target=\"#collapse3597\" aria-expanded=\"true\" aria-controls=\"collapse3\">\n Is it suitable for an SME? <\/a>\n <\/h5>\n <\/div>\n\n <div id=\"collapse3597\" class=\"collapse \" aria-labelledby=\"heading3\" data-parent=\".faq-accordion597\">\n <div class=\"card-body\">\n <p>Unsecured lending for SME\u2019s may be an attractive option especially for smaller amounts as it is straightforward and quick access to funding.<\/p>\n<p>The flexibility of repayment periods which can be up to five years allows smaller businesses to respond quickly to cash-flow or liquidity problems. As you are already trading, the lender will assess against your business prospects.<\/p>\n<p>However, for larger amounts (over $25,000) the rates offered on an unsecured loan may be uncompetitive as it reflects the higher risk taken by the lender. You may find short to medium-term loans at lower rates.<\/p>\n<p>An unsecured loan is ideal for the SME that needs to borrow money without providing security. If you are just starting up or you don\u2019t have any assets to use as collateral, raising capital can be tricky. A business loan which is not secured may be the optimal option for your business.<\/p>\n <\/div>\n <\/div>\n <\/div>\n <div class=\"card\">\n <div class=\"card-header\" id=\"heading4597\">\n <h5 class=\"mb-0\">\n <a class=\"btn btn-link\" data-toggle=\"collapse\" data-target=\"#collapse4597\" aria-expanded=\"true\" aria-controls=\"collapse4\">\n Have you also considered? <\/a>\n <\/h5>\n <\/div>\n\n <div id=\"collapse4597\" class=\"collapse \" aria-labelledby=\"heading4\" data-parent=\".faq-accordion597\">\n <div class=\"card-body\">\n <p>Unsecured lending is a broad term. As well as short-term <a href=\"https:\/\/swoopfunding.com\/ca\/knowledge-hub\/business-loans\/\">loans<\/a> and \u2018term\u2019 loans (i.e., medium-term and long-term loans), it includes, for example, <a href=\"https:\/\/swoopfunding.com\/ca\/merchant-cash-advance\/\">merchant cash advances<\/a>, <a href=\"https:\/\/swoopfunding.com\/ca\/loans\/revolving-credit-facility\/\">revolving credit lines<\/a>, <a href=\"https:\/\/swoopfunding.com\/ca\/knowledge-hub\/business-overdraft\/\">overdrafts<\/a> and <a href=\"https:\/\/swoopfunding.com\/ca\/knowledge-hub\/business-credit-card\/\">credit cards<\/a>.<\/p>\n<p>You might also want to consider the different types of <a href=\"https:\/\/swoopfunding.com\/ca\/knowledge-hub\/working-capital-finance\/\">working capital finance<\/a>.<\/p>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n \n <script type=\"application\/ld+json\">\n    {\n        \"@context\": \"https:\/\/schema.org\",\n        \"@type\": \"FAQPage\",\n        \"mainEntity\": [\n                                {\n                \"@type\": \"Question\",\n                \"name\": \"What is an unsecured loan? \",\n                \"acceptedAnswer\": {\n                    \"@type\": \"Answer\",\n                    \"text\": \"An unsecured business loan is a loan that doesn\u2019t require you to offer security (in contrast to a secured business loan). As these loans are not secured by collateral (assets to be sold in forfeiture of debt), they are likely to charge higher interest rates as the lender assumes a higher degree of risk. Also, the borrower is required to show an excellent credit history and cash flow projection. The loan amount could be from as little as $1,000 to $2,500, and the term rates up to 5 years.\"\n                }\n            },                                {\n                \"@type\": \"Question\",\n                \"name\": \"Why choose an unsecured loan?\",\n                \"acceptedAnswer\": {\n                    \"@type\": \"Answer\",\n                    \"text\": \"Here are three scenarios where you might look at taking out an unsecured business loan:  you\u2019re looking to borrow, but you don\u2019t have much in terms of tangible assets (e.g. you rent an office rather than owning commercial property) you do have some valuable assets but you don\u2019t want to borrow more than your assets are worth you\u2019d prefer not to offer specific assets as security  You might want to consider an unsecured loan if you want to borrow more than the value of your assets, if you would prefer not to offer security, or if you\u2019re a fast-growing business that needs finance quickly.\"\n                }\n            },                                {\n                \"@type\": \"Question\",\n                \"name\": \"Pros and Cons of an unsecured loan\",\n                \"acceptedAnswer\": {\n                    \"@type\": \"Answer\",\n                    \"text\": \"On the plus side, unsecured business loans are usually simpler and quicker to arrange than secured loans because there is no need for the lender to inspect or value any assets. However, in the absence of any security, the lender cares much more about your business\u2019s profile \u2013 and may also look at your personal credit history and personal assets. After all, they will need assurance that you can repay the loan if things don\u2019t go to plan. Unsecured lending is usually more expensive than secured lending because there\u2019s more risk for the lender. For an unsecured loan, the lender may look at:  revenue and profit (vs. loan amount) bank statements filed accounts trading history payment history (e.g. late payments, county court judgments) directors\u2019 histories (lenders may ask for a personal guarantee) forecasts and business plans your clients\/customers \"\n                }\n            },                                {\n                \"@type\": \"Question\",\n                \"name\": \"Is it suitable for an SME?\",\n                \"acceptedAnswer\": {\n                    \"@type\": \"Answer\",\n                    \"text\": \"Unsecured lending for SME\u2019s may be an attractive option especially for smaller amounts as it is straightforward and quick access to funding. The flexibility of repayment periods which can be up to five years allows smaller businesses to respond quickly to cash-flow or liquidity problems. As you are already trading, the lender will assess against your business prospects. However, for larger amounts (over $25,000) the rates offered on an unsecured loan may be uncompetitive as it reflects the higher risk taken by the lender. You may find short to medium-term loans at lower rates. An unsecured loan is ideal for the SME that needs to borrow money without providing security. If you are just starting up or you don\u2019t have any assets to use as collateral, raising capital can be tricky. A business loan which is not secured may be the optimal option for your business.\"\n                }\n            },                                {\n                \"@type\": \"Question\",\n                \"name\": \"Have you also considered?\",\n                \"acceptedAnswer\": {\n                    \"@type\": \"Answer\",\n                    \"text\": \"Unsecured lending is a broad term. As well as short-term loans and \u2018term\u2019 loans (i.e., medium-term and long-term loans), it includes, for example, merchant cash advances, revolving credit lines, overdrafts and credit cards. You might also want to consider the different types of working capital finance.\"\n                }\n            }          ]\n    }\n    <\/script>\n \n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":21,"menu_order":11,"template":"","segment":[295],"class_list":["post-2633","knowledge-hub","type-knowledge-hub","status-publish","hentry","segment-business-loans"],"acf":[],"featured_image_urls_v2":{"full":"","thumbnail":"","medium":"","medium_large":"","large":"","1536x1536":"","2048x2048":"","image_blog":"","image_blog_full":"","image_podcast":"","image_banking":"","image_blog_internal":"","image_blog_medium":"","image_single_banking":""},"post_excerpt_stackable_v2":"<p>What is an unsecured loan? An unsecured business loan is a loan that doesn\u2019t require you to offer security (in contrast to a secured business loan). As these loans are not secured by collateral (assets to be sold in forfeiture of debt), they are likely to charge higher interest rates as the lender assumes a higher degree of risk. Also, the borrower is required to show an excellent credit history and cash flow projection. The loan amount could be from as little as $1,000 to $2,500, and the term rates up to 5 years. Why choose an unsecured loan? Here&hellip;<\/p>\n","category_list_v2":"","author_info_v2":{"name":"Jimmy Rippon","url":"https:\/\/swoopfunding.com\/ca\/author\/jimmyrippon\/"},"comments_num_v2":"0 comments","_links":{"self":[{"href":"https:\/\/swoopfunding.com\/ca\/wp-json\/wp\/v2\/knowledge-hub\/2633","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/swoopfunding.com\/ca\/wp-json\/wp\/v2\/knowledge-hub"}],"about":[{"href":"https:\/\/swoopfunding.com\/ca\/wp-json\/wp\/v2\/types\/knowledge-hub"}],"author":[{"embeddable":true,"href":"https:\/\/swoopfunding.com\/ca\/wp-json\/wp\/v2\/users\/21"}],"version-history":[{"count":1,"href":"https:\/\/swoopfunding.com\/ca\/wp-json\/wp\/v2\/knowledge-hub\/2633\/revisions"}],"predecessor-version":[{"id":36934,"href":"https:\/\/swoopfunding.com\/ca\/wp-json\/wp\/v2\/knowledge-hub\/2633\/revisions\/36934"}],"wp:attachment":[{"href":"https:\/\/swoopfunding.com\/ca\/wp-json\/wp\/v2\/media?parent=2633"}],"wp:term":[{"taxonomy":"segment","embeddable":true,"href":"https:\/\/swoopfunding.com\/ca\/wp-json\/wp\/v2\/segment?post=2633"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}