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When applying for your first business loan, you will quickly find that it is much easier to get a secured loan rather than an unsecured business loan. What is the difference? Secured loans require extensive collateral, similar to secured credit cards (except secured loans tend to require the pledging of property rather than keeping money in a savings account.) How does a new entrepreneur find an unsecured business loan in today’s troubled economy? Well, it’s not terribly difficult if you know where to look.
The ideal place to start your search is with small banks, especially if they are recommended via word of mouth. Small banks are excellent resources, as they not only offer better service (they are less regulated and therefore more accommodating to new businesses), they also offer a lower interest rate. You may also want to consider going to the SBA or possibly considering a P2P loan. Both of these are very different sectors of the lending market, but they offer deals that you simply cannot find anywhere else. They are definitely worth looking into during your â€œpullâ€ period; that is, the two weeks during which all credit pulls made can count as one on your credit score.
Once you find a good opportunity to get an unsecured business loan, you will want to take advantage of it with a very solid business proposal. A good business proposal will consist of a strong and convincing opening, a detailed breakdown of the business model, a cold-cut market analysis, and a convincing demonstration of the business’s assets. The goal behind any business loan is to convince the representative that the loan will be safely repaid if it is in your hands.
Know where to look and what to do when you find it are the two most important keys to getting the loan that your business deserves.