Compare Interest Rates on Unsecured and Other Loans
This calculator provides a useful guide in comparing interest rates on both unsecured commercial loans and other forms of lending. While you may be focussing on an unsecured loan, there may be alternatives worth considering. Use our comparison chart and speak with us about your options.
Unsecured Loans – Bad Credit
Unsecured loans are often sought where an asset or goods are not available to offer as security against the loan and usually for purposes where a tangible asset is not being acquired. For example, to cover a cash flow shortfall or as capital.
As there is no security offered against the loan, it is considered a higher risk loan and will attract a higher interest rate than a secured loan. In addition, not all banks and lenders are prepared to offer unsecured loans. On that basis, it is quite a specialist area of lending and each application would require individual assessment and evaluation.
If the business has bad credit issues, that further complicates the unsecured loan scenario. Bad credit loans are also considered a high risk loan category and many lenders are not actively involved in extending bad credit business loans.
If you have bad credit issues, engaging the services of a broker to source you an unsecured loan may be of significant benefit. A professional broker will know exactly which lenders will be more open to considering your application and the broker can assist you in preparing your application to specifically meet the requirements of those lenders.
In addition, the broker should have honed negotiating skills to bargain with the lender to achieve the best outcome for you.
Business Loan Features
While individual business lenders will have their own guidelines and requirements for unsecured bad credit loans, we can provide a general overview of what may be possible.
- Rated as a high risk loan.
- Will have a higher interest rate compared with secured loans and for applicants with good credit.
- A personal guarantee or some other form of assurance may be required by the lender.
- Unsecured loans may have a short loan term, eg 3-6 months. Long loan terms are not usually offered for this type of loan.
- The interest rate may be set at a fixed rate or a variable rate, depending on the lender.
- The repayment is usually at a fixed amount.
Tips for Improving Your Unsecured Business Loan Application
It can be challenging for to achieve a workable outcome for high risk loans such as this, but there are steps that can be undertaken to improve the possibilities.
- Review and fix your Credit Report: Before applying for a loan, get a copy of your Credit Report and go through all the negative entries. Following the standard processes, see if any of these entries can be removed from your credit history. Historical entries may be able to be removed. This can be done for some entries after a certain amount of time following a set process. You can review these processes at credit reporting company websites.
- Provide as much detailed documentation as possible. The more positive things the lender knows about your business the better they may view your application. For example, if your bad credit issues relate to historical issues or isolated events and you have good current trading figures this may assist your application.
- Engage the services of a financial advisor to assist you prepare a business plan moving forward to support your unsecured business loan application.
Sourcing an Unsecured Business Loan with Bad Credit
If you are in this situation and even if you have been rejected by a bank or lender, a workable solution may still be possible. Our commercial loan company has connections with many lenders and brokers that may be open to assisting you.
Send us details of your requirements and we will respond with contacts for you to follow-up.
Connect with us for possible solutions for a bad credit unsecured loan.