The source of business finance is important in the business world, as it is impossible to begin any business without having sufficient amount of capital. The best source of business finance nowadays is the medium of business asset finance.
Presently there are a number of financial institutions that are dealing in business asset finance services. Amongst such service providers are the banks, the monetary organizations as well as the building societies.
There are a number of lenders that offer business finance asset services at relatively lower rates of interest as a result of the presence of a multitude of such service providers in the various financial markets of the world.
Besides providing financial assistance for the initiation of business activities there are many other uses of business asset finance services like the following:
- Expansion of Business
- Consolidating the Business Debts
- Buying Machineries and Equipments
There are two separate kinds of business asset finance services available in the financial markets all over the world:
- Secured Business Asset Finance
- Unsecured Business Finance
With the secured business asset finance services the applicant has to pledge a certain collateral against the loan. The commonly seen collaterals in this case are properties like houses, cars or crucial papers like bank papers. With these services the amount of equity of the specific property determines the amount of loan that the applicant might get.
For the unsecured business finance there is no need to pledge collaterals against the loan. This form of business finance service places more importance on certain kinds of proofs and documents. In these services there are no risks related to assets.
The rates of interest of these services are dependent upon the following factors:
- Equity of the Collateral
- Income Flow
- Economic Position
- Credit Records