Creative Collateral Hacks You Can Use to Get a Loan Faster + Cheaper

There may come a time when you may not qualify for a regular, unsecured personal or business loan. That’s when you’ll most likely turn to secured ones.

As lenders we prefer to simply get our money back. We don’t want to bring a legal action against our clients so we use collateral as a safeguard. We really don’t even want to deal with your collateral but it’s a way to protect us and get you a loan.

When you approach a business loan lender for financing, their first consideration is your ability to pay back the loan. One of the methods they use to ensure repayment is to ask you for some type of collateral.

Here are a few creative ways you can use collateral to get a loan approved faster at a better rate.

Commercial Properties
If you wish to buy a property, you can use that very property as collateral. On the other hand, you can borrow against a commercial property you already own to fund other projects. Banks usually lend up to 50% of the value of commercial property.

Equipment
Getting a small business equipment loan could be a clever economic move when you need tools and machinery for your venture. The very equipment you are seeking to purchase would act as the collateral, since the equipment is used to secure your loan.

Automobiles
You can use your vehicle as collateral if you own it outright. Estimate your car’s value using the Kelley Blue Book, and compare this to your payoff amount. Before offering your car as collateral, check with your lender to ensure that the terms of the small business loan you’re seeking will allow this.

Revenue-Based Loan
Another fast, simple way to obtain financing is with a revenue-based loan. No collateral is needed and there are no credit requirements because this type of loan is centered solely on the amount of money your company is depositing into its business account every month. Generally, borrowers can have access to funds the same day, regardless of credit: a very appealing option to startup businesses.

Even if you’re getting a business loan, you might pledge your personal assets (like your family home) as part of a personal guarantee.

This is just a sample of the many things you can use as collateral. For the more in-depth list, go here to see even more options. If you’re ready to see your options, click below and we’ll help you find what you need.

– Real estate (including equity in your home)
– Retirement accounts
– Cash accounts
– Investments
– Insurance policies
– Valuables and collectibles
– future receivables + payments

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  Creative Options
  Experience, equity and credit will help you get the best loan options available. If you own real estate we may be able use cross collateralization for your loan (the link opens in new window so you don't lose your place in the application)
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Borrowing Without Collateral

If you prefer not to pledge collateral, you’ll need to find a lender that’s willing to hand over money based on your signature (or somebody else’s signature). Some of the options include:

• Unsecured loans such as personal loans and credit cards
• Online loans (including peer to peer loans) are often unsecured loans with good rates
• Getting a cosigner to apply for the loan with you – putting their credit at risk

In some cases, like buying a home, borrowing without using anything as collateral is probably not possible (unless you have significant equity in the home). In other situations, it might be an option to do without collateral, but you’ll have fewer choices and you have to pay a higher rate to borrow.