Be Smart About Repaying Your Secured Business Loan

Online, September 11, 2011 (Newswire.com) - When looking for funds to start their own business or expand an existing one, many business owners seek out secured business loans. Why? Because despite the fact that the business owner is required to provide collateral, secured business loans come with much lower interest rates. This makes them very attractive in particular to new business owners.

But it is important to remember that these loans do carry risk. If you cannot repay your loan as agreed in the terms, you could lose your home or other property. This is something every business owner must seriously consider before he signs on the dotted line.

This won't be a concern, however, if you simply make your payments on time, every time, as agreed. Miss one payment, and your lender will become concerned. Miss more than one, and you'll have big problems. If you are tight on funds and know you're going to miss a payment or will be late making the payment, contact your lender immediately.

You may find that your lender will be willing to extend your due date for as much as 30 days so that you can meet your obligation. Most lenders, if you are honest and forthright with them, will do all they can to help you get back on track. After all, doing so benefits not just you, but the lender as well.

For some, this seems like the golden ticket. Can't make your payment on time this month? Then just call your lender - he'll understand and give you a grace period. But don't be mistaken. Lenders are not going to extend as much grace to you if this becomes a habit.

It's important that you remember that as a business owner, you're responsible for your business, its employees, and the reputation of your business. To consistently get behind in repaying your secured business loan could cost you not only your home or property, but also your good name.

It could also damage your credit. While it is advantageous if you can take advantage of having good credit to get a lower rate and better terms on your secured business loan, keep in mind that if you botch it up, you won't get this chance again. Lenders are on the lookout for borrowers who have good credit - and a good credit history. Ruining your credit could mean you won't get the interest rate or terms you need again.