Finding an Unsecured Business Loan with Favorable Terms

An unsecured loan is a type of loan that is not secured by collateral such as commercial property, family home, investment property, land, or another asset. Unsecured business loans are offered with a variable
 
May 14, 2012 - PRLog -- An unsecured loan is a type of loan that is not secured by collateral such as commercial property, family home, investment property, land, or another asset. Unsecured business loans are offered with a variable or fixed interest rate and customized repayments. Apart from interest rates, there are fees to consider. Some lenders charge settlement fees, application fees, and document preparation fees. Other fees may include annual review fees, monthly service fees, and statutory fees and charges.

Unsecured loans are offered by banks, credit unions, financial companies, and other establishments. Applying for a business loan under the Canada Small Business Financing Program is another option. Farming businesses, religious and charitable organizations, and not-for-profit organizations are not eligible under this program. Agriculture and Agri-Food Canada administers a similar program that targets the farming sector.

Before applying for a business loan, it is recommended to go through your company’s financial statements and develop a business plan. Financial institutions want to make sure that borrowers understand the market in which they operate and the products they offer. A good business proposal proves this, helping applicants to get approved for an unsecured loan with favorable terms and conditions. Applicants are encouraged to develop a business plan with a clear description of the company’s products and operations, strategies for growth, an analysis of the competition and the market, forecasts of expenses and revenues, and strategies for possible exit. A good business plan also demonstrates the applicant’s expertise and his understanding of the industry. Borrowers should also include their tax returns and personal credit records because financial institutions are going to review their personal income and credit history. Finally, to get a good deal, it is important to identify all major projects, inventory, and pieces of equipment the loan will be used for. Provide an estimate of the costs as well.

In some cases, lenders require collateral as to guarantee the loan. Any asset like equipment and real estate can be used to secure the loan because the lender can sell tangible assets in case of default.

For more information please visit: http://www.canadabanks.net/
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