4 Types of Unsecured Business Loans for New Sub Contractors

If you are a sub-contractor, then you have to make sure you have the skills, the equipment, and the contacts of general contractors so that you have a steady supply of income. Usually, you don’t go into the business for yourself unless you have already developed the skills you need for the jobs you want to do, and you also have made numerous contacts with general contractors who are aware of how great of a worker/company you are. You should also have saved enough money to secure the equipment needed to perform your tasks. If you don’t have enough money, then it’s possible to get some funding from lending institutions that offer unsecured loans for sub-contractors.

Here are a few common sources of capital:

  1. Friends and family. Typically, the people who are likely to have faith in your ability to pay them back are the ones who know you best. You may be able to acquire some extra money from those close to you, especially if you demonstrate that you have already saved some money on your own. Unsecured loans may mean that you don’t have much to lose when you are unable to pay the loan, but demonstrating that you have already saved money as well can show that you are serious and determined to succeed.
  2. Credit cards. This is a very convenient line of credit open to you, and credit card companies don’t usually care how you want to use the money. The advantage is that you can get the money you need immediately once you are approved, but keep in mind that the interest rate is higher than the usual bank rates. Your best bet here is to take advantage of teaser rates (usually zero per cent) and quickly accumulate enough work during that grace period. These grace periods always end, so you have to be as productive as possible during that time.
  3. Signature loans. If you have a very good credit rating, then you can actually get an unsecured loan with nothing but your signature and your promise to pay back the loan. In this type of loan, you are borrowing money based on your reputation and history as a low credit risk. Some credit unions and even some banks may offer you an unsecured loan. If you do succeed in getting one, then you are to be congratulated, because usually the interest rates are not as high as what you would have to pay when you use your credit cards.
  4. Peer-to-peer loans. There are websites that provide the means for investors to meet online with borrowers. You will have to post your loan request online, and hope that people who see it will help out. Some of the more notable websites are called crowdfunding websites, in which a “crowd” can contribute until you get the amount you need. The best ones for sub-contractors may include Crowdrise and Indiegogo, but you can do your own search online for the best crowdfunding sites.

As a future sub-contractor, part of your responsibility is to find enough jobs/contracts/projects to make a decent living. Getting unsecured loans for sub-contractors is a good test to see if you can make it on your own.

 

 

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Chris Lanchech

Hi everyone, my name is Chris and I am a junior analyst at Neebo Capital and an inspiring blogger. We enjoy speaking with business owners and entrepreneurs who come to Neebo Capital looking for cash flow solutions. Give us a call toll free at 1-888-382-3766 or Visit us online at www.neebocapital.com

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