Lending options

Secured Lending

You borrow the money for your business, and use your own assets as security. That means if you can’t repay the loan, as a last resort the lender may take your assets instead. Offering security reduces the risk for the lender, so the interest rate may be lower. This is the preferred approach for bank loans.

Unsecured Lending

You borrow the money for the business using only the business’ assets and your expected future cash flow as the security. This is a higher risk option for the lender, which means the interest rate may be higher. It’s also important to have a clear and robust estimate of your expected revenue.

Vendor Financing

This is a popular alternative to borrowing. Instead of going to a lender for the full purchase price upfront, the business owner lends you the money. You take over the business, and pay the original owner the full purchase price plus interest over time. Instead of your own money, you use the income from the business.