Depending on the experts you ask, the real estate market is either improving or declining. In a variable market like the one we’re facing today, is there anything in property management you can count on? The answer to that question is the same as it’s always been: change. The problem is no one can tell you when that change will come or where it will come from.
To get the resources you need to stay afloat in uncertain times, you may need to look toward less conventional means of revenue. What do these less conventional means look like? For instance, it may be time to consider resources like unsecured business loans.
If those three little words brought nothing to mind but horror stories of outrageous interest rates, risky lending, and habitual debt, please read on. This article will explain how you can avoid predatory lenders, educate yourself, and reap the benefits of unsecured financing no matter what the future holds for the real estate market.
The Do’s & Don’ts of Unsecured Business Loans
The universal rule of unsecured funds is that they are unrestricted. Meaning; they can be used for anything related to the business of real estate or property management. This leaves the floor wide open for you to use the funds as needed. However, the nature of the financing can lead to misuse as well. The best way to avoid these common pitfalls is to follow a few spending guidelines.
Guideline one: Have a plan in place before you borrow. Figure out what your business needs most before you apply for the funding. Use it to:
- Temporarily bridge a revenue gap during the seasonal slowdown in sales
- Revamp a marketing campaign to get the word out about your company
- Invest in establishing a real estate presence online
- Take advantage of deals in the area to remodel your office space
- Use the funds as part of an emergency backup plan
Whatever it takes to encourage company revenue, just make sure you plan out your investments from start to finish, including an efficient payment plan. A comprehensive strategy like this one well help you avoid falling into a cycle of debt.
Guideline two: Ask your bank or local Small Business Association for a list of reputable lenders.
Inviting the possibility of predatory lending is taking unnecessary risk. The simplest way to avoid this is to ask a trusted resource for references. Also, beware of lenders who charge large or ongoing fees, set interest rates of over 30%, or don’t require documentation. These are some red flags that indicate scams.
Guideline three: Shop around. Don’t just sign on the dotted line with the first lender you meet. To get the best rates, payment schedules, and borrower education possible, do some comparison shopping.
Once you’ve found your lender of choice, read everything before you sign any agreements. This will help you get the most out of your unsecured business loans and avoid the mistakes of many first-time borrowers.