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No Collateral Loans

What Is Collateral?

Collateral is any kind of valuable asset that a debtor pledges to the creditor as way of guaranteeing repayment of a loan.

Here's an illustration of how things work when you sign up for a loan with collateral.

  • Step 1: The creditor asks for collateral from the debtor. Most debtors use deeds to their vehicles, homes, or other expensive possessions like jewelry as collateral. The collateral must always have a greater value than the amount of money borrowed.
  • Step 2: The parties sign a legally binding contract regarding the use of collateral.
  • Step 3:
    • Possibility #1: If the debtor is able to pay off his loan on time, then the deed used as collateral will be returned to his possession and with no change in ownership.
    • Possibility #2: If the debtor is unable to pay off his loan on time and the creditor is unwilling to extend the terms or modify the rates being charged, the debtor is legally bound to abide by the terms and conditions set in the contract he had previously signed.

It may mean permitting the sale of the asset used as collateral and with the proceeds going to the creditor for his remaining balance to be paid off. It may also mean permitting the transfer of ownership of the asset used as collateral to his creditor, which is also performed for repayment.

Do All People Have to Put Up for Collateral?

No.

But banks, mortgage companies, and other lenders tend to be very selective about who they extend no-collateral loans to. Typical requirements for obtaining a no-collateral loan may include but are not limited to the following:

  • A substantial annual income, typically on the higher range of five-digit sales or profits or more.
  • An unblemished credit record.
  • Employment with a Fortune 500 company or ownership of a business with proven financial stability.
  • Years of doing business with the bank or creditor or bank records and credit cards that have been active for at least three years.

As you can see, not everyone would be able to qualify for all of the requirements above. And yes, we do mean ALL because banks tend to be unwilling to compromise in this score. They can only offer you a no-collateral loan if you can meet all of the requirements.

No Collateral Loans from Small Business Funders

Thankfully, you have another choice.

We at Small Business Funders are more than delighted to offer you a "no collateral" loan. To be more accurate, we are willing to extend you a cash advance based on your previous and expected sales. Certainly, we do have requirements as well but they are extremely easy to qualify for.

  • A monthly income of at least $2,500.
  • An established business that has previous earnings to speak of.
  • A business registered with the US government and with a valid license to operate in the country.

If you do meet all of the requirements listed above then you immediately pre-qualify for a no collateral loan from our company. Contact us today and get the financial aid you need in an instant.

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