Unsecured loans are not collateralized by an underlying asset. Given they are more risky, they typically have a higher interest rate. Most major business purchases are financed using secured loans; these loans require collateral and are designed to provide long-term solutions for business needs. Unsecured loans require no collateral and are designed to provide funds for a wide range of business purposes, including working capital, cash flow management, acquisition of equipment, repairs and renovations and virtually any other business-related financial need. In order to qualify for an unsecured loan, businesses typically must demonstrate a good credit rating over the course of a number of years. For any loan, unsecured or secured, lenders look at a number of relevant factors to determine the risk involved in the financial transaction. Documentation typically includes the last three years of financial records and a detailed description of the business plan. In most cases, the higher interest rates charged for unsecured business loans are necessary due to the higher risk assumed by the lender.
CNF Exchange can provide a number of valuable services for businesses in acquiring the right loans, unsecured or secured, to manage their ongoing funding requirements. Companies can complete and upload a loan application to the CNF Lender Exchange website free of charge, allowing them to access a network of lenders who provide these types of loan arrangements. Once the funding request has been submitted, lenders can present their proposals for evaluation, allowing the business owner to compare the terms and interest rates offered and to make a decision regarding the best solution for their financial needs. CNF Exchange can also provide added services to help businesses present the best possible case for their lending request; these services include assistance with documenting and compiling financial records and structuring the loan application package in a persuasive way. By working with CNF Exchange, companies can obtain the best unsecured loan arrangements to suit their short-term and long-term financial needs.