Running a business can be daunting and challenging, especially when it comes to borrowing loans. While this is true, there are times when you’ll need to make applications for these loans, depending on the type of loan that meets your business needs. During such times you may come across the term “Personal Guarantee,” which allows lenders to use the borrower’s personal assets as security leverage on the loan.
In case you’re unable to clear or pay back the loan, the lender may decide to seize your personal assets as security on the business. Since the risk involved is of substantial nature, new business owners need to make cautious decisions when looking around for such loans, because it places them at great risks should things go wrong with the business.
Importance of no personal guarantee loans
Operating a business requires the availability of cash flow, which is an important factor in the day-to-day management and running the business. So, getting cash flow when you need it, and without personal guarantee is vital to:
- Meet payroll requirements
- Place bulk orders of inventory
- Meet advertising costs
- General expansion of a business (remodeling, renting more space)
Most borrowers are skeptical and view the idea of attaching personal assets as guarantee to a business loan risky. However, businesses may undergo rough times and you wouldn’t want to place your business or personal assets at a risk.
Getting a loan for your business is challenging. Some lenders will likely deny you a business loan if your business credit is poor, or your business is new, and may require that you provide a personal guarantee due to the risks. According to a research by Pepperdine University, 61 percent of businesses with revenues less than $51 million had their business loans rejected without a clear reason. So you need to understand and weigh the risks involved when tying up your personal assets to a business. This option may not be worth the risk!
To get around this you need to find a lender who’s willing to provide you with a business loan without a personal guarantee.
Merchant Cash Advance
With Painless Processing, qualifying for a cash advance for your business is mainly dependent on your business’s capacity to process/intake deposits through credit cards, checks, and cash deposits on a monthly basis. Unlike conventional loans, repayment of merchant cash advancements is done through future credit card processing or ACH, ensuring flexibility in management of cash flow.
Available Cash Advance Solutions
If you’re looking for cash advance solutions with no personal guarantee, Painless Processing has the best offers to help boost your businesses’ cash flow. You can secure a fast loan on the following:
- Painless platinum cash advance
- Painless silver standard cash advance
- Painless “We Say Yes!” cash advance
- Painless “No processing, No problem” micro loan
- Painless hybrid mix cash advance
As a direct lending source, our cash advance solutions will provide your businesses with a flexible way to capitalize on growth opportunities by using current revenue position as leverage.