What happens when you have exhausted all your traditional funding options? You already have an outstanding bank loan and multiple invoice factoring loans, and now you need something that will fulfill your need for business funds quickly and easily. During such times, businesses might opt for high-risk small business loans. Newer small businesses and established companies often find it easier to qualify for these high-risk loans than bank loans.
What are the factors that make you a high-risk borrower?
- Your industry – you might need funding for your restaurant business, or expanding your construction company. Studies show that these businesses are considered a high-risk business. Even if your business does not have a questionable credit history, prospective lenders are likely to consider you a higher risk since these industries are not famous for their high sustainability. Check out the list of high-risk industries at Sunwise Capital today.
- You have a poor credit score – There is a distinct reason banks and other lending institutions consider you a high-risk loan candidate. As a business owner, it is not unusual to end up a low credit score, no longer being a prime loan candidate, especially with multiple outstanding loans.
Why should you consider high-risk loans for your business?
High-risk loans can have certain advantages. Here’s a brief list of the benefits you could be enjoying if you opted for high-risk loans instead of traditional bank loans.
- Quick access to cash – the biggest proof high-risk loans is quick access to the funds. While the banks and similar financial institutions take between 2 weeks to three months to process the loans applications, a high-risk loan can give you the necessary funds almost immediately. The speed of processing the request is one of its most significant advantages.
- No long-term commitment – another significant advantage of all high-risk lending is the short-term commitment. There is no long-term relationship between the lender and the borrower. The question of long-term commitment is not pertinent here. Typically, the terms range between 3 and 18 months.
- Easy to pay – It is easy to make daily, weekly or monthly payments and step into financial freedom.
- Online application – Okay! This one might not be a unique advantage, but we had to mention it because it makes the application and loan term comparison process so straightforward and quick. It might even take you less than 10 minutes to complete the form for a small business loan if you have the minimal paperwork required.
High-risk loans may cost a little more, but you can justifiably think of the added expense as the convenience fee for the quick and hassle-free service. These are fast and flexible loans with short-term repayment options, which make them ideal for all enterprises, small and large, old and new.
