Whether you are looking to start a food truck business, new service business, restaurant, or retail store, you will need cash to get your business going. Unless you just got lucky and won the lottery, chances are you are going to have to get cash loans to start your business venture.
Even if you already are in business, there are times when you will need extra cash to pay expenses, pay employees, or make an investment to expand your operations. If you do not have a huge cash balance sitting in the bank, then you, too, will need cash loans to keep your business going.
The most common small business loans people use are called collateral loans. This type of loan is where you use something of value as collateral for the cash you receive. It is one of the least risky types of loans for the lender. If you do not repay the loan, the lender will just sell the collateral to recover the money you borrowed.
Benefits of Collateral Loans
There are several benefits a business owner can take advantage of when getting a collateral loan for their business:
- Quick Short-Term Cash: Your money may already be tied up in equipment and other items that are hard to convert quickly into cash. However, using these items as collateral can help you get your hands on the cash you need for your business.
- Higher Approval Rates: Lenders are quicker to approve loans when something of value is being used to secure the loan.
- Larger Loan Amounts: Depending on the value of the item being used, you could qualify for a much larger loan, compared to an unsecured loan.
Drawbacks of Collateral Loans
There are a few cons of this type of small business loan you should be aware of, including:
- You need to have something of value. To qualify for a collateral loan, the item being used has to be worth something to the lender.
- You could lose your collateral if you cannot pay back the cash. The lender will take your property and sell it should you become unable to make payments on your loan.
Why Get a Collateral Loan from a Pawn Shop Instead of a Bank?
A bank will look at your credit history and your business’s credit history. It will also require you to provide financial statements, tax returns, and other documentation. If you are attempting to start a business, it will require you to submit a business proposal.
It will also ask for documentation showing how much cash you have available to invest in the business without the loan. Not to mention, banks limit which types of items you can put up for collateral, such as vehicles, houses, and land.
A pawn shop offers much more flexibility in obtaining a collateral loan for your business, along with these added benefits:
- No Credit Check: Loans are approved with good credit, no credit, and bad credit.
- Range of Items Accepted as Collateral: You can use vehicles, gold, jewelry, watches, gems, diamonds, electronics, and musical instruments to get your cash.
- Fast and Easy Approval: Most loans are approved in about an hour, and you walk out with cash in hand.
- Better Loan Offers: You tend to get more cash for your collateral than at a bank.
- Less Collateral Required: You don’t need high-value items to get a collateral loan at a pawn shop.
To learn more about collateral loans for your business, please feel free to stop by one of the 24 GEM Pawnbrokers locations in the New York City Area or call us at 718-596-5626 today!
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