No Collateral Loans
A “no collateral” business loan can be defined as a loan that utilizes a borrower’s promise to pay as security, versus a physical or tangible instrument of value. In a collateralized loan, like a car loan, failure to pay means that a lender can repossess the item used as collateral. In a no-collateral loan the opposite is true – no physical item is placed as security for the new loan.
The benefits of both collateralized and no collateral loans are distinct. Loans involving the use of collateral will typically have lower interest rates and longer terms, which can provide a low payment. No collateral loans are usually of a shorter term and have a higher interest rate. This can drive the overall cost of the loan higher based on it being of significantly higher risk business loan to the lender.
What Is The Purpose of a No Collateral Loan?
No collateral loans are versatile loan offerings that can be used for practically any purpose. The costs of losing a job far outweigh the costs of taking out a short term, no collateral loan to help pay for unexpected expenses. Another example is using a no collateral loan to pay outstanding taxes. The tax board can levy bank accounts, garnish paychecks, and ruin credit reports in an effort to collect on monies owed. By taking out a small business, no collateral loan, taxes can be paid and collection efforts stopped.
We Specialize in No Collateral Loans
A simple online application that takes no more than five minutes to complete is the first step toward improving your financial situation. After the application is finished, we will work to connect you to a lender who specializes in short-term, no collateral loans. In most cases, funds can be in your account within three business days of approval. Take control of your finances today with a no collateral loan from All Business Loans!