Are Your Loans Secured or Unsecured?
As a lender, this question comes up when asking potential borrowers about their bank payoffs. We go through the balance sheet with them to clarify what other secured creditors they have. Invariably, most will say only the bank but when we run a search, we find that not to be true.
An important rule of thumb for every business owner when signing on for any loan is to read the fine print. You need to know if the loan is secured or unsecured and if secured, by what. When you see a loan is secured, that could put you in violation of your bank agreement at which point you can say “no” to the loan and/or revise the terms.
Another important point is that when paying off a loan, make sure to follow-up with the lender to ensure they’ve removed the lien. You can go to your state’s website and run a search on yourself to see what liens currently exist and to what they’re attached.
Paying attention to these details is paramount to keeping your business finances in order and especially important when seeking new financing. Liens can slow down the process for your new lender and keep you from getting timely access to funds.
About Celtic Capital
Companies looking for working capital to cover operating expenses, fund growth, increase buying power and take advantage of vendor discounts and rebates turn to Celtic Capital. With an appetite for the more complex transactions, Celtic Capital has a history of success in crafting creative, flexible asset based financing solutions from $500,000 to $5 million with no financial covenants.
As an independent lender, working with companies nationwide, Celtic Capital is willing and able to alter price and deal structure and expand lines of credit to handle its clients’ increased revenues; and when cash flow is an issue, will look toward providing an inventory facility to help offset lost cash flow.