Small Business Loan Downfalls – What You Should Know
by admin in Business Loans
The Risky Business
Small business loans are considered high risk because they are typically used as seed money to start or run a
business that has yet to take off.
There are...
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Small Business Loan Downfalls – What You Should Know
by admin in Business Loans
The Risky Business
Small business loans are considered high risk because they are typically used as seed money to start or run a
business that has yet to take off.
There are typically no guarantees and no history of credit to use as a basis for the
loan, and often resemble personal loans in interest rates and loan terms.
Even with a well-prepared business
projection study and collateral, lending institutions are justifiably reluctant to provide funds for start-up
businesses.
Avail Prospects
There are four kinds of financial assistance that may be availed by small businesses from lending institutions.
These
include working capital lines of credit, credit cards, equipment leasing and letters of credit.
Only the first two are
appropriate for start-up businesses.
These are all short-term, with a maximum of one year in most cases.
Personal Pledge
In the off-chance that a longer-term small business loan is
Less
