Yes, you’ve read it well. Camino Financial doesn’t require collateral for its business loans. No tricks. No hidden costs. No false promises.
And how come? Most of all, at Camino, don’t ask for collateral to give easier access to capital to underserved markets that don’t have an asset to back up a loan. We live up to our motto: “No Business Left Behind”.
Scroll down and find all about this fantastic opportunity that can eliminate notorious risks that often come with applying for business loans.
What is Collateral?
First of all, it’s crucial to understand what collateral is, how it can affect your application for a small business loan and after all its impact is on your company, as well as your private life.
Collateral basically represents a form of protection for lenders. There is always a certain risk that small business owners won’t be able to pay back their debts no matter how good their intentions are when they get the necessary money. Therefore, the lenders put a lot at stake when they provide funding to small businesses. Collateral is an excellent way to protect themselves because if borrowers fail to pay back what they owe, lenders can seize some asset small business owners pledged, in an attempt to recoup the lost capital.
The most common types of collateral you can pledge when applying for a business loan are:
- Real property
- Unpaid invoices
- Blanket Liens
- Personal Guarantees
To get a better idea of what collateral is, let’s take, for example, that you need $10,000 to purchase new equipment to expand your business, so you apply for a business loan. The lender can require that you pledge your car whose worth is the same as the borrowed amount of money, i.e., $10,000 as collateral and a guaranty that if something goes south and you can’t pay back what you’ve borrowed, they can seize your car to make up for their loses.
Fortunately, not all lenders require that you pledge collateral and put your private or professional assets at risk, and Camino Financial is one of them.
To find out more about different types of collateral and generally everything you need to know about this specific requirement, read this complete article about collateral.
Secure and Unsecured Loans
When it comes to collateral and increasing your chances to obtain a business loan, it’s essential to understand the following notion: secure and unsecured loans. No worries, it will be explained in simple and plain English, so you’ll get a grasp of these terms without a hitch.
The secured loan represents a type of loan that requires pledging your assets. As previously said, this requirement provides certain security to the lender in case you fail to return your debts. That’s why it’s called a secured loan. If you apply for a secured loan, have in mind that:
Interests rates tend to be lower because the borrowers offer to pledge an asset as collateral.
- There is the usage of lien.
- The amount of loan can be higher.
- This type of loan is riskier for borrowers because if they aren’t able to pay off the borrowed amount, the asset would be taken off from them.
- Some common secured financing options are car loans and mortgage loans.
On the other hand, unsecured loans aren’t protected by any assets. This means that if you default on the loan, your property is safe and the lender can’t take it. However, take into account that:
- Interest rates tend to be higher since there’s no collateral given for the loan.
- There is no usage of lien.
- The amount of loan may be lower.
- The unsecured borrowing is risky for lenders given that they don’t have any guarantees if you don’t return what you owe.
- The most common unsecured financing options are credit cards, personal loans, and student loans.
Now let’s see how come Camino Financial doesn’t ask for collateral for their business loans and what’s in it for you.
Why Doesn’t Camino Financial Require Collateral?
There is no better way to answer this question and show you how the process works than to interview Marisol Loza — the Loan Processing Manager at Camino Financial.
Question: Do most business lenders require collateral to secure a loan?
A: Yes, most business lenders that offer lower interest rates and longer-term loans will require some type of collateral. The type of collateral lenders require are in forms of a vehicle title, mortgage, or even equipment.
Q: Why Camino Financial doesn’t require collateral?
A: Camino Financial does not require collateral because we want to make our loans accessible to our target market. Not all people have paid off vehicles or a mortgage they can use to secure the loan.
Q: That means Camino is running some risk when granting a loan. If a borrower fails to pay back, you can lose money. What do you do to compensate for this?
A: Because we don’t require collateral, our interest rates are slightly higher than lenders that do require collateral, like a bank for example. Our requirements to qualify for a loan are also taken into consideration to make sure the applicant is a good candidate to receive a loan. We take into consideration additional data points to ensure the borrower can sustain the loan.
Also, our slightly higher interest rates don’t discourage our members to apply for a loan: they are assured they will maximize their investment and make sure to match each with the financing option that better suits their needs and goals. There are always ways to lower your interest rates and have in mind that, after just 9 months of timely payments, our member can apply for a second loan at a lower interest rate.
Q: Please explain how you check this information from the borrower:
- ¿Personal credit? – A: We review the personal credit through credit bureaus like Experian Transunion and Equifax.
- ¿Global cash flows of the business? – A: We analyze business and personal financials electronically through a secured third party system by the name of PLAID.
Q: What benefits does it have for the borrower the fact that your loans are unsecured? Any drawbacks?
A: To some borrowers, collateral is not an option. An unsecured loan allows business owners to invest in their business much faster. From my experience, I have not gotten any drawbacks. I found that most clients like unsecured loans.
Q: If the borrower wants to put up collateral (in an attempt to lower the interest rate), can he/she do it?
A: Currently Camino Financial does not have a product involving collateralized loans but we are always looking for a better way to benefit our clients.
Meet Camino Financial
As you can see, Camino Financial doesn’t demand collateral for their business loans for real. That way, your personal and professional assets remain safe and protected when you borrow working capital, which is essential for growing your operations undisturbedly.
Besides, Camino Financial has much more to offer:
- Straightforward and simple application process. You can get everything done online, so there is no need to lose time on visiting the lender. Save your time and your effort.
- Fast turnaround processing. After applying for a business loan at Camino Financial, you will receive an immediate quote. Once your application gets approved, you will receive the funds directly in your bank account within 2-10 days.
- No SSN or credit history needed. Camino Financial is one of the rare lenders that accept candidates who just have an ITIN.
- Flexibility in the loan amount and the uses of the loan. You can use the cash for any of your professional needs with minimal restrictions and limitations. Our loan amounts are also flexible: from $75,000 to $300,000.
- Excellent customer service. Our loan specialists are bilingual and will strive to match your Company with the most optimal financing solution.
- Exclusive resources and benefits. Our members have access to educational resources that help them improve their finances, as well as exclusive benefits like discounts and invitations to webinars.
Once you opt for Camino Financial, here is what you will need to file to qualify for a business loan:
- Proof of business registration and business license.
- Your business bank statements for the last six months.
- Your most recent business and personal tax returns (only for loans of 50K or above).
As previously said, you can submit all the documentation electronically, no need to print, fax or carry them with you.
The only thing left to do is to step into this process. Apply for a business loan at Camino Financial and leverage a risk-free cash injection that can help you develop your business even further.