Businesses have to deal with everyday challenges to keep their business wagon rolling, but this can be a task for many as you need a good amount of capital to cover day to day expenses.
However, many businesses fail to meet this requirement and end up in financial trouble. In fact, according to reports, 90% of all startups fail within the five years and a lack of capital is the leading cause for why this happens.
Businesses have to deal with a lot of challenges, not just financial challenges but others as well. They have to manage finances and pay all their dues on time. Other than this, they must manage inventory and employees, which is easier said than done.
When businesses are not able to manage all this due to a lack of capital, they typically turn to business loans. There are many institutions out there providing business loans. You only have to find the right organization and apply for a loan.
Based on the type of loan applied, you can get up to a million dollar in loan, however you will need a very impressive business setup to be able to get such a huge amount approved.
According to reports, almost all businesses apply for some kind of a loan at some point in time. This is due to the benefits they provide. Without much ado, let’s have a look at the benefits of business loans:
Higher Success Rate Than Other Options
Around 73% of businesses turn to business loans to handle their money problems due to the ease and high success rate they offer.
While banks may only approve 23% of business loans, online lending companies approve more than 48% of loan applications. Business loans are easier to get if the requirements are met.
The most important thing here is to pick the right lender. For example, banks can be a lot of trouble to deal with as there are stringent requirements and red tape involved. This is why you should look for private lenders.
You can run a search on Google and compare different options to find one that is the most affordable to you, i.e: has the lowest interest rate.
Collateral Free
In most cases you will need a collateral to get your loan application approved. A collateral is basically an asset that a borrower offers to the lender as a guarantee that the money will be paid back. However, many business loans do not require any collateral. You only need to provide the details and meet the eligibility criteria to get your loan request approved.
Use The Money For Any Purpose
In most cases, there are no limitations oh how you use a loan amount. You can use it for any purpose related to your business, i.e: to buy more capital, to expand business or to pay utilities.
However, in some cases, especially when the amount is huge, there may be certain restrictions on how the loan money can be used. This is why it is important to go through the terms and conditions carefully and sign on the dotted lines only after you understand the contract properly.
Low Interest Rates
Business loans are not as expensive as some people like to think.
According to Unsecuredbusinessloans.com.au “on average, the interest rate of a business loan varies from 9% to 13%. The interest rate depends on several factors including the amount of loan, the time period provided to pay back the loan and also the institution”.
On the other hand, interest rates on credit cards can be between 36% to 48%, which is a lot higher than business loans.
Business loans can save your business when you are in a financial crunch. Just look for a reliable lender and apply for a loan today.
