Why Small Businesses Aren’t that Small After All

Unsecured business loans

It’s no secret that the small things in life can still make a big difference. After all, that’s why people are always told not to sweat the “small” stuff, right? Right. It’s always the small stuff that causes the biggest problems or leads to the biggest — and best — solutions, and good things almost always come in small packages. So at the end of the day, small isn’t really so bad after all.

As such, it should come as no surprise that small businesses are making a big and noticeable impact on the economy in the United States. In fact, a whopping 28 million small businesses in the United States make up for an impressive 54% of all sales. Furthermore, small businesses provide more than half — 55% — of all U.S. jobs. Talk about a win-win-win situation.

However, despite being small, these businesses have some pretty big expenses that must be paid in order to operate on a daily basis. This is exactly where working capital loans for small businesses come into play.

Funding a small business from the ground up can be expensive to say the least. Every small business owner doesn’t need a group of “funding experts” to tell them that. In addition to small business loans, many small business owners decide to take out second mortgages in order to fund or kickstart the start of their dream to own and operate a business of their own.

But working capital loans are much different than other small business loans, in that they’re intended for specific purposes such as paying employees. As opposed to being used as long term investments for equipment and other needs, working capital loans are meant for short term needs such as marketing costs, payroll, and other daily operational needs. Because it’s always the small day to day details of small businesses that are some of the most important.

Just as with other kinds of small business loans and even personal and private loans, working capital loans can be both secure or unsecured. If you’re credit is in good standing, the lender is more likely to grant you an unsecured loan as you are considered to be low risk. On the other hand, mediocre or poor credit will most likely result in a secured loan that requires collateral such as physical property in order to receive the funds.