When building your business, you hope that the product you're selling, or service, you're providing, is considered valuable. Your service fills a need; therefore your business will grow. This is how budding entrepreneurs typically approach a lender for small business financing. Create a business plan. Perhaps conduct operations on a small scale to establish credit, and then apply for a loan.
If a business owner comes up with obstacles to qualify for a traditional loan--perhaps only a few months under her belt in business, less than perfect credit, insufficient collateral or a more immediate need for cash than a traditional bank can fill, she may get creative. Fundraise online, seek investors, ask friends and family, secure a business cash advance or merchant cash advance.
The Rise of Online Pawn Shops
Pawn shops and pawnbrokers are not new, but the concept of online pawn brokering is. In 2009, the first online pawn shop launched, where estimates are given online based on a description of the item and deposits are made to a person's account upon receipt of the item. The loan is secured as personal property serves as the loan collateral. As in any lending situation, there are pros and cons to an online pawn shop loan.
Pros: Pawnbrokers are not required to report a defaulted loan on a borrower's credit report, since they take possession of the item after default and can sell the item for full market value. For those in possession of valuables--hopefully not too sentimental in nature--the possibility for near-instant cash is real.
Cons: Defaulting on a pawn shop loan means you'll lose ownership of whatever item you've put up for collateral. Many online pawn shops list a clear and limited list of items acceptable for pawn. Once an amount is agreed upon, loans are typically issued at around 80% of the items current market value, and interest rates range from 4 - 8% depending on item, working out to be anywhere from 48 - 96% over the course of a year.
The question remains, if you're an entrepreneur getting a small business off the ground, how do you want to finance the operation, through business value or valuables?
BizLender Small Business Funding
Looking for unsecured small business financing solutions? Talk to the professionals at BizLender about a business cash advance or merchant cash advance today. Small business funding is available with no collateral required, in as little as three working days, with flexible repayment schedules to suit your needs.