Can Your Business Benefit From a Commercial Loan?

Aug 18, 2021

Did you know capital deficiency is one of the top reasons 80 percent of businesses fail?

As a business owner, especially one in a capital-intensive industry like construction, you need sufficient capital to fund your operations and grow the business. Unfortunately, accessing this capital can be challenging.

The good news is you have a couple of options. First up, if you have a healthy personal savings account, you can dig into it and bail out your business. Or, you could go the equity route, but that means you'll own less of your company.

Another option is to secure a commercial loan.

Now, there are two types of commercial loans: secured and unsecured. In this article, we're sharing 5 ways your business can benefit from unsecured working capital.

No Assets? Worry Not

It's a standard business practice for commercial banks to require collateral that has an equal or greater value to the loan you're seeking.

You see, banks make money when they give loans, but it's not in their best interest to lend to high-risk customers. If you have no collateral, you're a high-risk borrower. Your application will most likely get rejected.

Fortunately, there are other lenders, like Express Capital, who offer unsecured working capital to specialty businesses. You don't have to worry about providing collateral.

In most cases, all you need to do is prove that you need the money to increase your revenue opportunities.

Let's say you're a residential building contractor. You have just secured a contract to build a home. You need $70,000 to deliver the project, but all you have is $20,000.

With some bank statements and maybe relevant project documents, you can secure capital to fund the project that same day. We know you'll be able to repay the loan once you've been paid by your client.

Quick Approvals Mean Faster Access to Cash

Banks are notorious for slow loan approvals. You could submit your application today and get approved after a whopping 30 business days!

As a construction company or the owner of specialty trade like plumbing, you don't have 30 days to wait for a loan approval. Your clients need work done, and they need it done as soon as possible. If you take longer than necessary to start on projects, they won't hesitate to move on to another contractor.

By approaching a company that offers unsecured working capital, you'll have the opportunity to access the money as soon as the same day!

At Express Capital, for instance, we offer same day approvals if you need short-term working capital to complete a job, hire additional staff, purchase material or expand your facility.

The quicker you access capital, the faster you'll complete your jobs, and the more you'll make your clients happy.

If you've been in business long enough, you certainly know happy clients don't just recommend your services, they insist that their friends do business with you!

Keep 100% of Your Business

Equity capital has its advantages. There is no pressure to make monthly payments, and you can even get away with it if the company fails. Equity investors simply bet on your business being successful in the future.

However, you'll have to give away a share of your business. The more capital you need, the more ownership you have to give away. You'll also need to split up the profits with your business "co-owners."

If the prospect of giving away pieces of your business is unappealing to you (and it mostly is), then unsecured working capital is ideal for you.

After getting the loan, your only worry will be making the repayments until the loan is paid off. On the upside, you'll have a greater peace of mind knowing you have complete ownership of your business.

Low Interest Rates

Interest is the price lenders charge for making loans.

It's also one of the biggest reasons many business owners shy away from getting commercial loans. If you borrow $10,000 for 5 months at 5 percent interest, you will repay a total of at least $10,500.

Whether that is fair or not will depend on how profitable your business is.

What we do know though, is many providers of unsecured working capital should charge higher interest rates than commercial banks.

Banks charge lower rates because they also get your collateral. If you default, they'll come after the attached asset. On the other hand, providers of unsecured capital charge higher rates because they face higher risks. If you default, they stand to lose their money.

But at Express Capital, that is not the case. We offer rates as low as 5.9%.

With low interest rates, you'll still have enough money left to fund other jobs even after making your monthly repayments.

Access to Large Sums of Money

Construction, engineering, remodeling and moving jobs can take up vast amounts of money.

If you need a lot of working capital, your first instinct may be to try and get a loan from your bank. After all, the average small business loan in 2015 was $371,628.

What if we told you that you can also secure such an amount (or something very close) from a provider of unsecured working capital?

It's true. At Express Capital, we make short-term loans of up to $150,000!

Next time you're in need of vast working capital, don't be so quick to rush to commercial banks. We will definitely give you a better deal!

Unsecured Working Capital Offers Greater Repayment Flexibility

Providers of unsecured working capital are typically willing to offer flexible loan repayments.

They understand the cash flow problems many small to medium-sized companies face. You complete a job, but the client takes longer than agreed to pay up. Or an unforeseen circumstance -- like bad weather -- delays the project.

They'll work with you to offer a loan that suits your business needs.

Choosing Your Business Options

Capital is the lifeblood of a business. Without it, your business will spiral to the ground. Lucky for you, there are a number of options you can turn to.

As we've demonstrated, unsecured working capital is one of your best options, and it'll benefit your business.

If you need it, talk to us.


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