To Take Or Not To

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To Take Or Not To The Pros And Cons Of A
Business Loan
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In the current economy one does not need a
finance degree to know that surviving financially
is a tough job. Companies have gone bankrupt
while most people are unemployed. In an
economically fluctuating environment, business
loans from banks seem to be a helping hand for
businesses. But before applying for a business
loan, it is better to go through the pros and
cons so as to make an informed decision. The most
popular type of business loans that are usually
sought after, are the commercial business
loans. Pros of a commercial business loan Low
interest Amongst all the loan options,
commercial bank loans offer the lowest rate of
interest. It helps business owners to access
critical funding while ensuring that the overhead
costs remain low. Convenient time The loans
offered are usually long term, between 3-10
years. This allows business owners to pay back
the loan slowly while profits in the business
increase. Lower investment risk Risk of loan
default is minimized due to the low rates of
interest and extended plans of payment.
Investment risks reduce because of this. Loan
options Commercial loan comes with the option of
two types of loans-secured and unsecured loans.
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Advantages of secured loan At a lower cost, a
much more substantial amount can be borrowed
which helps your business become stable. The
repayment period is much longer which helps
reduce the monthly charge Advantages of
unsecured loan Unsecured loans are easier to
sanction as they do not require any sort of
collateral in return The period of loan
completion is much more faster as there are no
collaterals to evaluate and are usually borrowed
in small amounts Rightful ownership The
ownership of the company remains in the hands of
the loaned unlike in venture capital investment
wherein a fraction of your company is signed over
to the investor.
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Cons of a commercial business loan Difficult
credit Qualification for a commercial business
loan is extremely difficult, as the one applying
for a loan requires excellent business credit.
This means that first time business owners will
have difficulty applying for the loan without
building prior credit. Long application Making
the application process extremely exhaustive is
the requirement for a detailed financial report,
assessment of projected revenues and clear
mention of associated business risks.
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Disadvantages of the loans Secured loan The
interest rate on the loan is much higher making
it a risky affair even if the borrower has
provided security against the capital A secured
loan has the potential of leaving you a bit cash
deprived, making it difficult to pay other
bills Unsecured loan Compared to a secured loan,
the interest on an unsecured loan is even
higher Qualifying for an unsecured loan is
difficult. In case the business has a poor or
non-existent credit history, then the application
might not be approved by the lender Personal
details To be eligible for the loan, the
institution needs to be provided with personal
financial history, such as credit score, annual
income and debts. Personal autonomy is reduced
with a commercial loan as detailed account of the
prospective expenditure needs to be
provided. Half the sanction Banks do not give
the whole amount asked for as the loan. Usually
only about 70-80 of the amount is sanctioned
which makes it necessary for the borrower to
scout around for other sources.
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Taking decisions about the financial future of
your business might seem like a tedious task. In
fact, there is no denying the fact that handling
finances and the legality involved in such
finances takes up most of the mind space. In such
situations, you wish you had someone to give your
business a push in the right direction.  This is
where Filingenie comes into the picture. Being a
consultancy platform, it facilitates business
growth by pointing you in the right direction,
whether legally or financially or in any other
required way. To gain a better idea about our
services, pay a visit to our website or contact
us on 869-195-0000.  
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Thank You.