The financial industry is currently under an unprecedented level of uncertainty as a result of Brexit, and as such banks and traditional methods of lending are less likely to lend unsecured to businesses in the UK. However, using a few simple steps – such as a merchant cash advance – could be the perfect remedy to this problem. So how does one go about getting unsecured funding?
Know Your Options
Depending on the type of business you run, there will be a number of lending options available. For example, funding for hotels can be sought through business loans, cash advance loads, traditional unsecured loans and through external investment – and of course many of these will also have multiple options and providers within them.
Do Your Maths
This is easier said than done, but essentially an unsecured loan or an alternative to bank loans needs to be considered with business turnover in mind. Are the core of this should be the cost of the loan vs. the benefit of the loan.
For example, a hugely costly, high interest loan, used to pay for small upgrades or a few new furnishings in a property might not be worthwhile. However, a merchant loan advance with a set fee and a structured business plan aimed at growing a business is very much worthwhile.
Consider the pros and cons of each option you have on the table – in some cases you might not even need the option itself.
Avoid Borrowing Against Your Assets
Of course, the benefit of an unsecured loan is the ability to avoid borrowing against assets within a business. This creates safety and security for you, but not the bank – hence why in unpredictable times banks are unwilling to lend.
Using services and alternatives to bank loans with no fee can be a huge benefit but ensure due diligence is carried out across contracts, repayments and any upfront costs.
As a business, 365 Business Finance provide alternatives to bank loans though merchant cash advances. This allows borrowers to pay a clear set-fee with monthly repayments based on a set percentage of income through card payments within the business. Always consider your best options and seek professional financial advice.