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There are a myriad of options available to small business owners seeking working capital loans to help them get their business off the starting point. One of them is SBA 7(a) term loans as well as working capital loans that are not secured. You could also look into alternative financing options that could be used to finance your small-scale business.

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SBA 7(a) term loans
If you are a small-scale business owner and are in need of working capital, you should think about applying for SBA 7(a) term loans. These loans are flexible and can be used for many reasons. The funds can be used to refinance debt, expand your business, or buying assets.

The SBA guarantees the loan in part which means lenders are less likely to default. The guarantee comes with a cost. The cost is usually 3.75 percent of the loan’s guaranteed amount.

The SBA website provides a comprehensive explanation of the SBA 7 (a) loan. They’ll also have access to the SBA Lender Match tool, which matches applicants to SBA-approved lenders within two days.

As with most loans, the interest rate on a 7(a) loan will depend on the amount and repayment terms. It can be fixed or variable and can be tied to the prime rate.

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To be eligible for an SBA 7(a) loan, you will need to fill out an application and get it approved. A lender will then assess your financial standing and analyze your business plan. After the approval, you’ll sign a loan contract and receive the loan funds.

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Unsecured working capital loans
A working capital loan that is unsecured is a wise financial decision regardless of whether you are expanding or starting out. It can be used to fund equipment, expansion or to upgrade your building, among other things. The right type of loan will help your business thrive.

The process of getting a working capital loan may be much simpler than you think. A loan can be obtained on a single form unlike a line credit. You can even use three months of bank statements from your business to finance your loan.

Unsecured loans carry higher rates of interest. This is because the lender takes on greater risk. As such the business owner should have a high credit score to be eligible. In addition, you should have a plan in place to repay the loan on time.

Unsecured working capital loans are a fantastic way to bridge a short-term financial gap in your company. Using a working capital loan, you can take advantage of low prices on key products and upgrades to your facilities. A working capital loan will enable you to remain in business even in difficult economic times.

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Another benefit of an unsecure working capital loan is that you don’t have to pledge any of your assets. The lender will usually require an electronic payment processor as well as a deposit account.

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Alternative financing models for small companies
Many entrepreneurs are choosing alternative financing models for small businesses as the most preferred option. These flexible financing options can provide the funds you require for expansion.

Alternative loans are less expensive than conventional ones. Banks typically require large down-payments and you might have to wait a few months before getting the money you require.

Lines of credit, cash advances for merchants and invoice discounting, credit card, and credit cards are all options for business loans. All of these options offer you the chance to get quick and easy funding.

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Business lines of credit are similar to credit cards, with the exception that they charge only interest on the cash you take out. These options are particularly beneficial for expenses that are short-term.

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Working capital loans can be helpful for day-to-day expenses for things like paying employees or placing orders for inventory. However, they’re not the best suited for major business changes.

When selecting a lender for an alternative business loan, make sure you select a company that has experience. Also, think about your credit score. The higher your score, the higher your chances of securing the best financing deal.

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Other alternative financing options for small businesses are peer-to peer lending. Similar to crowdfunding, peer-to business lenders offer small businesses loans from multiple investors. This is especially beneficial for small businesses that do not have collateral.

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