A survey was conducted by Balboa Capital to gauge who grants loan to small business owners for unsecured business. As per the survey nearly 75% of small business owners have a clear understanding of unsecured small business loans. 60% of them have acquired their loans from non-bank lenders. 24% have taken it from a national or regional bank. 9% took it from a credit union. However 7% of them did not indicate from where they acquired their loans.
The survey further reveals that 25% firms with an unsecured business loan have a loan of up to $25,000. Nearly 38% of them bear a loan ranging from $25,000 to $100,000. Almost 25% of the group holds a loan that ranges from $100,000 to $250,000. Whereas 12% firms haves encompassed a loan of $250,000 or more.
There is already a strong relationship existing between the applicants of unsecured business loan and the non-bank lender which is precisely one major reason for them to decide. Besides this easy application process, quick decisions and funding along with greater flexibility regarding payment schedules adds cherry on the cake.
Matthew Lent, Manager of Ancillary Products/Working Capital at Balboa Capital remarked that as per the survey result, small business owners are increasingly getting attracted towards unsecured business loans. The owners look forward for a loan that gets qualified easily with a limited turnaround time. They are seeking the loan to help them cover the costs of inventory, equipment, and everyday business expenses. It was observed that six out of ten small business owners acquired unsecured loan from a non-bank lender during the first half of 2019. This proves that non-bank lenders like Balboa Capital have started becoming the mainstream providers of unsecured loans to small businesses.
Lent further added that an unsecured loan is very convenient to business owners as they get the funding online without giving any security and the procedure is short and quick. Moreover the terms and interest rates of unsecured loans rely on the credit score of the borrower.