Wednesday, May 07, 2008

Loans for Small Business Development and Personal Use

Loans can be divided generally into secured and unsecured loans. Secured loans require collateral which the bank can seize if the borrower is unable to repay the loans in the stipulated period of time. On the other hand, the loan is generally of a larger sum and can be repaid in a longer time frame. Most property or real estate loans would fall into this category.

Business Loans however, generally falls under the category of unsecured loans. These type of loans is useful in starting a business or in purchasing equipment and expansion of an existing business. Generally no collateral or equity is required but the amount is dependent upon the owner's credit history as well as if they are willing to provide a down payment. Other factors that are taken into considering would be the realistic projection of cost and revenue for the planned projects when starting a business. For expansion purposes too will the the current revenue be a determining factor for the amount being approved.

Personal Loans are something that you can borrow against your future paycheck which is a smaller amount than a business loan. This is usually for some immediate and important events that crops up like a vacation, hospital bills, paying for a wedding, home improvement, car repair and many other unforeseen circumstances. In personals loans, our spending habit and lifestyle will be taken into consideration the funds available to us and the borrower's track record of repayment past debts.

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