Unsecured business loans are made with a mere signature and promise to pay as the guarantee. Credit cards are an example of unsecured business loans. This revolving credit is used to purchase products and services. “Your word is your bond” on unsecured credit card loans. The financial institutions trusted that you had the responsibility, determination and integrity to repay your unsecured business loans.
Unsecured versus Secured Loans
Secured loans are protected by physical assets – equipment, vehicles and property – as collateral. These are traditional banking loans with lower interest rates reflecting the real value of your company. The collateral can be appropriated by financial companies if you default.
Unsecured debt is protected by your “promise to pay.” It is a good faith promise. It is actually like fiat currency, which has no real gold or silver backing it. You trust that your paper dollars will still have value when you use them. By themselves, they are just paper.
Your credit cards are unsecured debt. They are plastic cards holding intangible debt. These unsecured business loans have no physical assets backing them up. Unsecured debt has higher interest rate charges because there is no collateral backing it.
Struggling With Minimum Payments?
Politicians can survive on pithy “Everything is great” propaganda. You live in the real world where you need real solutions for real problems. You can’t just “ignore” a problem or have your friends in the media “turn a frown upside-down.” You don’t get bailed out. You must make the bottom line reflect real success.
“Out of sight, Out of mind”
It is very easy for large corporations to build up large debts. Employees will casually charge their credit card for a vast array of expenses. The money is intangible. The payment is delayed into the theoretical future. Some believe that tomorrow will never arrive.
It is very easy to get in trouble with unsecured business loans. The interest rates continually increase. You might have had some short-term problems. Some customers might have gone bankrupt. You are trying to keep your head above water. You see input prices increasing and know that the high interest rates on your unsecured business loans is unsustainable.
Chrysler’s Multiple Business Failures
Chrysler has struggled financially for decades. As a large corporation, they were able to get a massive political bailout. Yet, have their products improved? After the bailouts, is the market position superior? Probably not.
“There is no free lunch”
Small businesses account for 99.7 percent of the employment firms. Most jobs are created by the small entrepreneur. Unfortunately, the political system ignores the contributions of the most vital business sector. The big companies get all the attention.
Banks Cleaning Up Their Books
Banking functions according to the laws of money supply and demand. In the 1980s, the Savings & Loan crisis led to the punishment of criminal bankers. In the 1990s, the economy had recovered enough so that financial institutions had large amounts of cash to lend. They lowered their standards and lent to anyone with a pulse.
By 2008, the reality started to sink in as the real estate bubble burst. Houses that had appreciated 200 percent lost 50 percent of their value. Some banks collapsed. Unlike previous crises, no one substantial was punished in 2008. Instead, the banking con artists were rewarded with “golden parachutes.” The toxic assets were passed onto the next bank. Now, the banks are cleaning up their books.
Money is Scarce
Everyone is in debt. Money is scarce. Lucrative unsecured loan agreements are a dinosaur of the past. Banks are cleaning up their books.
Banks are so debt-strapped, they aren’t loaning money. Consumers are so debt-strapped, they aren’t spending. Businesses are so debt-strapped, they aren’t creating jobs. See the trend developing?
Don’t Throw Good Money After Bad Money
Somehow, you must end the unsustainable cycle of debt. New loans don’t fix problems with paying old loans. Financial experts and professional poker players know when to cut their losses. When they have made a mistake, they only make it worse by continuing to try to make it work. A business leader makes the important decisions to save the ship by adjusting the debt repayment amount.
Trust in real debt relief to renew your business bottom line. No one benefits by a complete business collapse due to high levels of debt.
Real Business Debt Relief
Financial success requires hard work and dedication. Problem-solving skills are essential for weathering the storms that sink other financial ships.
Lead your company by contacting the debt relief specialists at National Debt Relief Group. Fill out the form and get your free consultation. It is an easy process that can save your business from unsecured debt that is spiraling out of control. National Debt Relief provides real answers for small business debts.
