Small business finance is offered to those, who are about to start their own business and are facing some financial problems. It is also meant to provide help to manage all the financial needs of a running business. This kind of finance is offered to small scale businesses and is available in two different modes called secured and unsecured small business finance.
People with bad credit history are also offered this kind of financial assistance to improve or start their business, but there are some on specific conditions which they must agree.Any kind of finance comes in two different packages, secured and unsecured and the basic difference between these are the collaterals and the interest rates.
To avail secured small business finance one needs to place one of his/her properties as collateral (security) and the loan is granted. The collateral can be anything like car, home, bank account, bonds, insurance policies, etc.
This security helps the borrower to pay lower interest rate and avail flexible repayment options to pay back the loan amount. One can also borrow large amount of money if the property offered as security carries higher value.
On the other hand, the unsecured business finance, needs no collaterals to provide the loan. Unlike the secured version, it follows a simple process to provide financial assistance. The interest rate is slightly higher in these loans because there is actually nothing secured against the money, and thats why, the loan duration is also very short.
Small business finance options are available to all the businessmen, whether he has a good or bad credit history. Anyone suffering from CCJ, IVA, arrears, bankruptcy, defaults, etc is also eligible to enjoy the advantages of small business finance but the borrower must follow some conditions and should try to improve the credit history.
To borrow, preferences should be given to the well known financial companies having good reputation in the market. A good deal of research should be done before taking any decision about selecting a financial company and selecting a definite plan. With good research one can take advantage of the best offers of small business finance at reasonable rates and loan duration.
Last Updated on : 1st August 2013