If you are currently working for a boss, fed up with all the situations, and want to start a business of your own, then you need to consider many things. One of the things to consider is how to finance your business startup. One of the alternatives is cash loans. How unsecured cash loans can help you start a business, and what caveats you should be aware of when taking such loans?
Loans, when taken properly, can help you with many ways. In term of unsecured cash loans, they are typically used to finance borrowers’ health issues or even buy a new car. However, there is another way you can use cash loans: To finance your business startup.
Cash loans for startup: Pros and cons
Cash loans are advantageous in a sense that approval takes only minutes. You can get the cash within 24 hours time from reputable companies, often offered online like this website, so there’s no waiting game to get on with your startup plan. Moreover, unsecured cash loans involve minimal paperwork, eliminating the hassle of secured loan applications. And yes, “unsecured” means you don’t have to back your loans with assets.
However, you need to be aware of the fact that unsecured cash loans, due to their nature, will charge higher interest rates compared to secured loans. Moreover, you need to meet certain requirements that, all in all, minimise the lender’s risks.
What kind of cash loan repayments you should expect?
Let’s take CashFirst.com.au as an example. The Australian-owned personal and cash loan company requires for the loan applicants to meet 3 requirements: Must be employed, earn over $20,000 p.a., and must have good credit history. That’s why 90 percent of cash loan applications got rejected, particularly due to the good credit requirements, as people taking cash loans are those typically having bad credit history.
What kind of payment you should expect? Based on the online calculator provided by CashFirst.com.au, a $5,000 loan with 24 months repayment period would require you to pay $70/weekly, $140/fortnightly, or $303/monthly. I strongly suggest you to use the simple calculator to see whether you can afford the loan payments and plan accordingly.
Some things to consider when taking cash loans for staring up a business…
Starting up – obviously – will need you to finance your business before meeting the break-even point (BEP.) Be sure to take the cash loan repayment amount into your startup operating expenses, and plan accordingly to see whether the BEP can be reached as quickly as possible.
You need to also be aware that, no matter how you badly want your business startup to succeed, the stats say that 9 out of 10 new businesses fail within the first 2 years. So, you HAVE to be sure that you can repay your loans even if your startup failed.
There are many entrepreneurs adopting the concept of “win all or die.” I’m not a fan of going all out in entrepreneurship recklessly; I prefer to have a business plan ready before you pursuing any business ideas. So, that being said, whenever possible, I recommend you to always find the safety net(s) for your business startup, in this case, be ready to pay the remaining balance of your cash loans if your startup turned out to be a bust.
On how to finance your business startup responsibly