The broken record says: “You have to spend money to make money.” This is a truth many small businesses do not want to face as you will find yourself wondering where you are supposed to get the money in the first place. Small Business Lending Illinois banks and alternative lenders offer will always look to your collateral when you try to find funding to grow your business. Understanding what you can use for collateral as well as the implications of using that collateral will keep you on your toes and safe from losing the shirt off your back.
Home Equity
Using your home as collateral is risky business as you have a lot to lose if things don’t work out. You have to be sure you are going to be able to make money to pay back the small business lending Illinois banks or alternative lenders have allowed you so you don’t lose the roof over your head. In fact, with the past recession issues, many banks will not even consider home equity as collateral nor will they look at vacant land as a worthy asset.
Your Inventory
Depending on the nature of your business, you can consider using your inventory as collateral. Some banks will consider this, others will not. You can also look to the Purchase Order on a large order as potential income for the business and use this as collateral to demonstrate you are in line for a big payment. Again, not all banks will consider this, but alternative lenders may.
Cash and Financial Accounts
As the saying goes, “Money Talks.” If you have money in the bank, this will speak volumes to any financial institution considering Small Business Lending Illinois relies on for funding small businesses. You can also use CD’s and other financial accounts and investments. Of course on your part you are taking a huge risk of losing your money, but if you are going for the loan hopefully it’s because you have a serious commitment from potential clients and you are trying to meet their needs.
When going for that loan consider all of your options and weigh the risks. You want to be certain that the risk you’re taking is worth the investment in the end. Contact World Business Lenders, our specialists will be more than happy to tell you why we are the best choice for your business funding needs.
