Comparing SBA Loans With Unsecured Small Business Loans

Most business owners know that they can apply for financing through the Small Business Administration (SBA). Fewer business owners know that there are alternative financing options which may be available to them.

Let’s take a look… 

SBA Loans vs. Unsecured Small Business Loans

The SBA has an affiliation with the government and a long history of guaranteeing loans. This alone leads many business owners to utilize their service.

However, as with any business decision, it is important to understand who you are doing business with.

The SBA is NOT a Lender

The SBA’s role is to guarantee a loan that is underwritten by a bank.

The SBA needs to funnel loan applications to the bank and the bank needs to approve loans for the SBA. This means that the customers interest are not always put first in their pursuit to do business.

In fact, a recent Coleman Report shows that 1 in 10 recipients of an SBA loan defaults.

Why?

Because business was done between the SBA and the bank even though the terms of the loan were not in the customer’s best interest. The bank now owns the customer’s business, home, car, etc. 

Don’t Be Fooled By That Prime Rate+

So why are business owners attracted to SBA loans? The answer may be that it has been instilled as the acceptable practice.

That and the low interest rate.

Don’t be fooled by a low rate though, once the numerous fees are added in, the cost of the loan is substantially higher. 

Also, the approval process for an SBA loan typically takes upwards of 6 months–during which time the business can be missing out on revenue opportunities. 

Unsecured financing is a newer option. The first benefit can be seen right in the name…. 

Choose “UNSECURED” for These 3 Benefits

  1. Faster, Easier Approval: 

    You don’t need to be a rock star to apply for unsecured financing. In fact, here’s what you DON’T need to qualify for an unsecured business loan or an unsecured business line of credit:

    1. NO Min. FICO
    2. NO Min. Time in Business
    3. NO Min. Annual Revenue
    4. NO Extensive Financial History
    5. & NO Collateral Necessary!
  2. Protect Your Personal and Business Assets: 

    With an unsecured small business loan–or even an unsecured business line of credit, there is no risk of losing your business, home, or car.

    Whew! That’s one worry no business owner needs!

  3. 24 Hour Approval: 

    The second benefit is how quickly unsecured small business loans may be approved. Most loans are approved within 24 hours allowing business to continue and revenue to come in. Unsecured, fast approval; why doesn’t every business owner use this option? Many are scared off because the APR is higher than a traditional SBA loan. However, refer back a few paragraphs and you will see that the cost of loans are truly in the same ballpark.

  4. Less Time, and Much Less Paperwork:

    SBA loans require massive amounts of forms to be completed and documentation to be supplied.This is time that the business owner could be working his business and earning income.Conversely, unsecured financing requires a 1-page digital application and only 3 – 6 months of business bank statements.This can be quickly completed and the business owner is back to work!

Choose NBC’s Hybridge SBA Loan: 4 Benefits

  1. Larger Offers, & Prime Rate+: With a guarantee from the federal government, you know that SBA loans are going to come with some of the most exciting and beneficial terms for small business owners:
    1. Loan Amount: $50k – $5Mill
    2. Loan Terms: 10 – 25 Years
    3. Time to Fund: NBC’s expedited processing can get clients SBA funds as soon as 45 days after applying!
    4. Rate: Prime Rate+
  2. Funds as Soon as 24 Hours: Unlike normal SBA loans, NBC’s Hybridge SBA Loans come with a capital injection included in as little as 24 hours after applying, so business owners can take advantage of growth opportunities immediately, and gain working capital that “bridges” the funding gap between applying for and receiving their expedited SBA loan.
  3. Easier Approval: Normally, something as small as a tax lien or outstanding taxes proves SBA qualification impossible for SBA customers. However, with the Hybridge SBA bridge loan, customers can use their immediate capital to become financeable ASAP. All you need to qualify is:
    1. 2+ Years Time in Business
    2. 685+ FICO
    3. $10K in Monthly Gross Sales
  4. Faster, Simpler Process:With the extreme amount of paperwork and sluggish processing normally involved, commonly SBA Loans can take up to 6+ months to complete funding. Fortunately, SBA loans obtained through NBC’s Hybridge SBA Loan program complete funding nearly 4x as fast–get SBA funds as soon as 45 days! (See: How Does the Hybridge SBA Loan Work?)

Apply for an SBA Loan or Unsecured Small Business Loan

If you are in need of financing for your business, call (877) 482-3008 to consult with a Business Financing Advisor, or fill out our simple 1-minute application online here to get the funding you need in as little as 24 hours. 

Learn more about unsecured financing and unsecured small business loans and how it can benefit you!

 

 

About the Author, David Surrusco
David Surrusco is the Head Content Writer at National Business Capital, is best known for his work in creating what has become the best business financing blog known to mankind: The NBC Advisor.