Secured Personal Loan and Bad Credit

Secured Personal Loan, Bad Credit, and You Want to Start Your Own Business?

If you are thinking of starting your own business but a secured personal loan, bad credit and no finance of your own to put down seems like an impossible hurdle to get over, then do not lose heart in these difficult economic times. There is a big push by Western governments at the minute to try and stimulate the economy and finance is becoming available for good business ideas that look like they should be able to turn quite a quick profit.

Firstly you would need stringent business plan preparation and secondly you will need to find a lender that specializes in a small business loan, bad credit situation. You will need to raise enough finance to weather the setting up of the business and provide enough cash flow to purchase any necessary equipment and supplies, provide wages for staff and have enough in case of unexpected additional expenses.

A secured personal loan, bad credit lender will be able to provide the required finance provided you have some sort of tangible assets that the lender can secure against the loan, for example if you own a house then it is usually possible to borrow up to 125% of the equity in the property. In your business plan, you would need to take account of all of your debts as well as the small business finance required.

Unsecured business loans are obviously better to get as you donít have to risk your own home or personal assets, but they tend to have a higher interest rate charge and, for someone in your situation, would probably be impossible to get, so donít waste your valuable time going down that route; the only other possibility to consider would be guaranteed secured loans if you can find somebody who is interested in becoming a partner in your business and is willing to put up some sort of collateral to guarantee the loan. But starting up a business as a partnership, opens up another minefield to negotiate.

A secured personal loan, bad credit lender will initially be suspicious of you starting your own business so the business plan preparation has to be well thought out and presented with confidence; market research that supports your business idea is probably crucial as the lender will want hard facts, not speculation, if they are going to risk investing some finance in your business. If you have a large amount of equity in your property, you might even be able to buy a new car at the same time as buying the business, but caution is advised Ė there will always be additional unforeseen expenses when starting your own business and banks / lenders suddenly become very ruthless if you canít meet the agreed payments.

There are a lot of sharks out there, just ready to pounce on a small business loan, bad credit person, and what may seem like an exceptionally good deal could have some nasty clauses buried in the small print of the contract. Always get your solicitor to check over the terms and conditions of any small business finance agreement, whether it is for an unsecured business loan or a secured bank loan.

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