All You Need to Know About Unsecured Business Loans

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StrategyDriven Managing Your Finances Article |Unsecured Business Loans|All You Need to Know About Unsecured Business LoansWhen you first try to establish your business the first thing you look for is money. Money is an essential component of any business. How are you going to finance the idea which you have in your mind is the main question. When you read the biography of any big businessmen they all tell how they gather up finances. Some sold their land some borrowed money from relatives some put their house on stake to get some finances luckily nowadays unsecured business loans facility is available for people who want to venture in business.

What is an Unsecured Business Loan?

Let’s take a brief look at what an unsecured business loan is all about. In secured business loan when you go to a bank or any other loan provider you have to put your tangible asset on stake (as a guarantee) to get the loan but in unsecured business loan, you don’t have to put your asset (which is commonly known as collateral) as a guarantee instead of the bank see your credit history and provide you a loan on the credibility that you have given them written promise that you will return this money.

An unsecured business loan is the entrepreneur’s heaven to start a new venture without seizing his asset.

How many types of unsecured business loans?

We are dividing them into two main categories

  • One type of unsecured loan is made you repay and withdraw continuously.
  • The second is fixed terms of payment lender has to make small payments until it reaches the whole amount.

Why it’s Called Unsecured?

It’s called unsecured because one party is lending money but another party is not putting collateral on stake. In secured business loans if the lender failed to repay you can seize his asset but this is not the case with an unsecured business loan.

What information is required by a bank or a Venture Capitalist for Providing an Unsecured Business Loan?

1. History of Your Transactions:
The first and foremost information that banks ask is about your track records of three months how much cash you withdraw and how much you have reimbursed in the bank.

2. Business Partners:
The second most important information required by the bank is who was your business partners in the past and how was your dealing with them and who are your current and future partners and their record of business and stakeholders.

3. Your Lending History:
Yes, you heard me right your lending history, who you had lent money in the past, their contact details and did you return the money, and at what time?

4. Tax Details:
How much tax you have paid annually as an individual and how much you have paid as a business entity.

5. Credit Score:
Your credit history is very important, to lend you money, banks will also want to know your credit scores and details about your credit card history

6. Profit and Loss:
Another important thing lender wants to know is how well is your business running. Is it making a profit or running at a loss? As it plays a vital part to know about the borrower of the money, although they have some knowledge about your money details. All this information is required by the bank to process your application on the unsecured business loan.

Pros of an unsecured business loan:

1.Less Time Required to Proceed:
As we all say that time is money, you need money on an urgent basis, the unsecured loans are provided on an urgent basis which will eventually work for you.

2. Flexible period (payback):
It is also a great advantage for you, to pay back your loan according to your flexibility. The purpose of an unsecured loan is to provide you money on an urgent basis and also pay back the amount according to your flexibility of time.

3. Flexible amount:
It is very important to pay back the amount of loan in a lease form, like you may have the option to pay back the amount on a monthly lease basis.

4. Good for young entrepreneurs:
As they are fast loan providers and have the different options available for the convenience of the borrower it is beneficial for the entrepreneurs, as it will not only help them to start the business but also it will help them to grow their business.

5. No risk to a personal asset:
As business is all about profit and loss, the unsecured loans are providing benefit to the young energetic individual to provide the business opportunity with the option of no personal guarantee needed, which means that if the company faces any losses in future, the owner of the business will not be personally responsible for the loss.

Cons of an Unsecured Business Loan

  • High Markup
    Everything comes with advantages as well as some disadvantages. As the unsecured loans will help the borrower to pay back the money in lease form, but it has a higher amount of mark up as compared to other loans available on an online basis.
  • Increase in the Overall Borrowing Cost
    By providing the loans on a lease basis, it will increase the overall cost for the creditors, also, it will not help the borrower to save the interest cost which is the main consequence in an unsecured loan.

Conclusion:

Several loan companies are providing loans and giving help to the entrepreneurs but they also are helping the different businesses in different ways, to establish and grow.

To get loan from a genuine money lenders are most essential thing which a person need to look up for, also, after getting a loan the borrower must need to work hard to repay it, as it is the responsibility of the borrower to work and return the money and also to establish the business in a greater way.

Also, search for the money lenders that are providing the services according to your own need and according to your own choice of paying back money policy which is feasible for you.

Research, before you get into the loan process, as getting a loan according to your needs, is difficult. Try to clear your mind and focus. Moreover, try to discuss your business plan with the other successful entrepreneur so that you may also get tips for your business venture.

For entrepreneurs, try to work on innovative ideas that will lead your business venture towards a successful journey, although it will require a great effort from business owners as well as with the other partners but will eventually work. Lookup for the opportunities and avail them on time so that you can grow your business.

Find High Acceptance Loans the Easy Way

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StrategyDriven Managing Your Finances Article |High Acceptance Loans|Find High Acceptance Loans the Easy WayWhen it comes to personal finance, finding the right sources when you need funds quickly is paramount. Finding a balance between a trusted lender and high approval rates can be tricky and making the wrong choice can end up costing you considerably more. With lawmakers reported to be looking to tackle high-cost, high-interest loans, you’ll want to be able to spot one before using one. So where can you still find a loan with high acceptance and affordable interest?

Search the Market

To be able to find lenders who offer high approval rates with low-interest rates, you’ll need to look at the market in general to compare the lenders. This way, finding high acceptance loans becomes a much easier task to navigate. You’ll find specialist lenders who can help with searching the market so that at a glance you can compare what’s available to you. You’ll want to ideally avoid the lenders who will charge you a fee during the application, only pursuing no fee lenders. One of the problems you may find is that some lenders will claim they can offer high acceptance even with poor credit and charge a fee to go through an application. This way, they will still make money from you even if you are declined. Be cautious with any of the fee-charging lenders and make sure you read their terms carefully before agreeing to a loan.

Avoid Payday Lenders & High Interest

As tempting as it may be to use a payday lender, you should consider all your options. Because payday loans are designed for the short term, they generally charge a higher rate of interest. This is why it is not advisable to take one out if you want to pay a loan over a longer period with more manageable repayments. Although they offer same-day funding and high approval rates, you’ll find better options when you start to look.

Budget Accordingly

This is important; you should be working out exactly what you can afford to borrow and repay each month before applying for any borrowing. Even if you think you know what you can pay or a loan term seems affordable, you should audit your finances to see what disposable income you actually have each month. The reason this is important is that some lenders who offer high acceptance rates may focus more on what you can afford than your credit rating.

Although your credit score will play an integral part in the approval process, you need to be able to prove what you can afford.

Responsible lending is vital in 2020, with more and more lenders wanting to ensure that lending to you does not create financial difficulties. You should, for this reason, only use trusted lenders. If you’re unsure how to spot a trusted lender, then use the Better Business Bureau to see a list of them. Not only will you be able to see all the trusted lenders you should ideally use, but you can also find out about any current scams you should avoid falling victim to.

Don’t Go For the First Offer You See

There is searching, and then there’s searching well; because there are hundreds of online lenders available, it can be easy to go with the first offer you see just because the monthly repayments seem affordable. As the saying goes, if it’s too good to be true, then it probably is. Fully consider your options, even when using a comparison tool.

Although a lender may come out as the top result in comparison, that could just be because it offers the lowest monthly repayment. It may miss out on other aspects such as the interest rate and length of the term. If you take your time and not rush into a loan just because you want the funds quickly, you can hopefully save yourself a lot of money.

Consider the Amount You Want to Borrow

With the loan amount itself, do you need to borrow that much? The reason you should ask yourself this question is that it can affect the chances of being approved. The lower the loan amount is, the higher the acceptance rate because the lender will be taking a much lower risk. You should consider whether the loan amount is enough to cover what you need it for, and secondly, that it is not too excessive. Some lenders will offer a higher amount by saying what they can offer up to, but you should carefully consider if you need to borrow more than you need.

Additionally, with higher amounts of loan, you may need to offer the lender more assurances, such as with a secured loan, and attach something as collateral to guarantee it. If you want to keep it unsecured, then keep it low to what you need it for and those high acceptance rates should still be accessible.

How to Choose the Best Accounting Software for Your Small Business

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StrategyDriven Managing Your Finances Article |accounting software|How to Choose the Best Accounting Software for Your Small BusinessWhile only 1 in 100 small businesses get audited each year it is still a good idea to have top-notch accounting software to document your business activities.

If you are a small business, chances are you don’t have a degree in computer science or accounting, so how do you choose the right software for you? Read on to learn how to choose the right accounting software for your small business.

How to Choose The Best Small Business Accounting Software

If you are an entrepreneur, chances are you are looking to keep overhead costs low and profits high. You also have limited time and resources, so hiring a big accounting firm is out of reach. This is where accounting software can help.

Small business accounting software can help you keep track of your income and expenses and depending on the program integrate with your other company activities.

For example, Quickbooks point of sale integrates POS and accounting into one place making it easier for you to manage your retail company.

Step 1: Take the Time to Identify Your Accounting Needs

What kind of company do you run? Is it a brick and motor retail space with a point of sale and inventory needs? Are you a 100% virtual reseller that takes donations?

Regardless of your company set up, you do have unique accounting needs. Identify them so you can choose a software that meets them. Many of the software programs on the market have the ability to integrate with other programs, such as customer relationship platforms.

If you are already using some of these other programs make sure the accounting software you use integrates with them. You do not want to have to enter data into two locations, it takes valuable time and can create errors.

Step 2: Project Your Needs into the Future

You probably have a 2, 5 and even 10-year plan for your company, even if it is not written down on paper. As you are looking at accounting software, jot down your plans for the future. Then determine if the software you are considering will grow with your company.

Ideally, look for a software package that is scalable, meaning that it will grow with you. It is great to have all the bells and whistles up front, but why pay for something you don’t need? Scaleable programs will allow you to add features as you grow and need them.


Step 3: How Much Can You Afford

One of the fastest ways to eliminate choices is by price. Determine how much you can afford, and anything that is not in your price range, eliminate. Again, bells and whistles are nice if you need and can afford them.

Budgets often have some wiggle room but make it a rule that if a solution is more than 25% over your set budget, you’ll walk away.

Now that you understand how to choose the right accounting software, grab your computer and start applying this knowledge to your search.

Does Your Small Business Need Support?

If you are a small business you don’t have the resources to hire all the business professionals you need to move your company forward. This is where we come in, StrategyDriven provides business leaders with the planning and execution advice, tools, and practices needed to achieve superior results.

We take the time to learn your company’s mission and vision. Then, armed with our highly experienced and educated staff, we develop a clear, forward-looking strategy unique to your companies needs.

A plan is only as good as the activities you implement, so we translate that plan into the day-to-day activities you need to make that plan a reality. We can help with choosing accounting software, creating disaster recovery plans, and help with all aspects of program management. Contact us for the out of the box ideas your small business needs.

Spending Money To Save Money (Yes, Really)

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StrategyDriven Managing Your Finances Article | Entrepreneurship | Spending Money To Save Money (Yes, Really)

As the owner of a modern business, you naturally understand the need to make your capital work harder. This removes a great deal of stress from the venture while also allowing you to pass some of the savings onto your clients. Price comparisons and cutbacks can have a positive impact. Still, it’s possible to find investments that spearhead further savings.

Spending money in the right places is essential or creating an efficient company built for sustained results. Here’s are the best solutions at your disposal.

1. Security, Safety, & Protection

Prevention is the best form of protection for your business. Aside from removing the threat of damaged reputations, it can actively reduce insurance fees and put an end to wasted time. Hiring a site safety manager may feel like an added expense, but it’ll save you vast sums of money in the long run. Data protection is equally important in this modern age. Updating your systems can prevent major problems including penalties as well as direct damages. Given that almost half of all hacks hit small business, now is the time to take control of the situation.

2. Accountancy

Like a site safety manager, a professional accountant can seem to be an unnecessary expense. However, they will save you money in the long run as they have a far greater understanding of the financial and legal elements. When added to the time savings on offer, it is evident that this will be a wise addition for your company. Related investments into automated accountancy software can seriously boost your endeavors. Aside from the financial benefits, you will gain peace of mind and enjoy easier time management. You’d be very foolish to ignore it.

3. Eco-Friendly Upgrades

It’s very easy to embrace a “why fix something that isn’t broke?” mindset. In reality, though, upgrading the workplace with eco-friendly features is essential. While you may not see the property value improvements seen by residential users, the monthly energy savings are huge. Boosting the company’s green credentials can also enhance its reputation. For the sake of your finances, brand image, and personal responsibility, this is a vital addition. Even the employees will respond positively to this new approach. Better still, the results can be seen right away.

4. Marketing

Regardless of the industry, reaching the target market in a cost-effective manner is vital. However, the cheap option doesn’t necessarily offer the best value for money. It’s important to focus on the cost per acquisition rather than the actual overheads. With this in mind, social influencers can be the best investment for your business. When supported by improved web design and a conscious effort to gain positive customer reviews, you should see the very best returns.

The Final Word

While wasting money is the worst thing a business can do, there’s no reason to fear spending money. As long as you invest in the right features and expertise, your venture will begin to see positive outcomes in the very near future. The positive outcomes can bring upgrades for many years to come.

7 Ways To Finance Your Business

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StrategyDriven Managing Your Finances Article | Entrepreneurship | business finance | 7 Ways To Finance Your Business

Financing a business can be a big obstacle for new startups and established companies alike. It isn’t always easy or even possible to obtain funding through the usual channels, especially if you have no track record to show lenders or investors, and without the money required, it can mean that the business simply cannot succeed. However, there are some ways to obtain the money you need, and if you want to start or grow your business and need funds to do it, you can look at these options to see if anything will work for you.

1. Your Savings

It’s true that not everyone has any savings put aside, but if you do and there is enough, then you might consider using that money to fund your business. This can work out perfectly because there is no requirement for you to borrow the money from anyone else, and therefore your business won’t be in debt (although, of course, you will want to have the money paid back to you over time). You won’t be giving away any equity either, which is something that some business owners don’t like the idea of. Plus, if you do need to borrow more at a later stage, your business’s credit won’t be affected.

2. Your Investments

For those who like to make investments and trade, the profits made in this line can be something you can use to start your business or add funds to it when you need to purchase something specific that will, in turn, help you to make more money in the long-term. Investing doesn’t automatically mean that you will make a profit, which is why checking out the gold and silver price regularly and finding a good broker will help you. However, when you do make money, it can be ideal for your business.

3. A Business Loan

Possibly the first thought that will come into a business owner’s mind when it comes to finding money to fund their project is a business loan from a traditional lender such as a bank. It can work out very well, and with enough research, you will be able to find a variety of different loans with varying interest rates and special deals. You may not be eligible for all of them, however, and applying for too many loans all at once can damage your credit rating. Therefore, it is wiser to make appointments to speak to bank managers or investment advisors to find out what you can and can’t do, and what will work best for you. It may be exciting to find that you can borrow tens of thousands of dollars, but remember that this money must be paid back, and that can be the part that causes problems. Think things through carefully and only borrow what you know you can afford.

4. A Personal Loan

If your business has no trading record, it might be difficult to obtain the loan that you want, in which case a personal loan, assuming your credit rating will allow it, could be the ideal alternative. You take out the loan and then make a director’s loan to your company. The company pays you back each month, and you then pay your own lender back too. This way, you aren’t ever out of pocket, and you don’t have to worry about making repayments.

However, the vital thing to bear in mind with this kind of loan is that you are ultimately liable for it. It means that if the company cannot pay you for any reason, you still have to make the repayments for your loan. Make sure you have two or three months’ worth of repayments in a savings account just in case you need to pay the money back yourself.

5. Angel Investors

Angel investors are groups of people or individuals who use their money to fund businesses and projects that they think are interesting, have potential, and will bring them a profit. This last point is the most important of all because although angel investors do have the business’s interests at heart, their main aim is to make money from whatever they invest in.

The first step in obtaining an angel investor is to write an interesting and informative (and truthful!) business plan as this is what they will want to see before making any decision. You should also work out how much equity you are willing to give away in your business, and how active a role you want the angel investor to take. Some simply want to give you their money and leave you to get on with running the business, and others will want to have a more active role. It is essential you know how you want to do things before agreeing to anything, and don’t get carried away if someone offers you money; make sure you are happy with the deal first.

6. A Credit Card

Credit cards can be supremely useful, or they can be disastrous, and which outcome will depend on how sensible you are with their use. Funding an entire business on a credit card, especially if it is a personal one, is not a good idea; this can leave you in vast amounts of debt that you find difficult to pay off. Plus, the interest rates on credit cards tend to much higher than on other forms of borrowing such as a loan from a reputable company. However, for smaller business expenses a credit card can be ideal, as long as you pay as much off the balance as possible each month. Paying just the minimum amount will mean you spend a lot more than you would need to otherwise, and it will also take you longer.

7. Friends And Family

A loan from a bank or other lender might not be possible if you or your business don’t meet specific criteria, and an alternative might be to borrow money from friends and family. Ideally, you should have a loan agreement drawn up so that everything is legal, and so that everyone knows what is expected of them. This way, there can be no disputes, and you will know how much to pay and when, just as your friend or family member will know how much of a return they should be able to make.