As a jewelry store owner, you may be considering a collateral loan as a way to get the funds you need. But what exactly is a collateral loan? And how do they work? In this article, we’ll explain everything you need to know about collateral loans for jewelry stores, including how they work and what you need to qualify.
WHAT IS A COLLATERAL LOAN?
A collateral loan is a type of business loan that uses a portion of your inventory as security for the loan. That means if you default on the loan, the lender retains possession of your jewelry to repay the debt. Collateral loans are often used by businesses that don’t have ready access to traditional sources of capital such as a bank loan.
HOW DO COLLATERAL LOANS WORK?
The process for getting a collateral loan is much simpler than other types of business loans, with the main requirement to provide information about your assets. The lender will then determine a valuation of your inventory and determine how much they’re willing to lend you and at what interest rate. Once you’re agree to the terms, you’ll sign a contract and agree to repay it with interest. The collateral lender will then take possession of the inventory being used for collateral. If you default on the loan, the lender can keep the collateral to repay the debt.
THE BENEFITS OF A COLLATERAL LOAN.
There are several benefits associated with taking out a collateralized loan:
They are easy to qualify for: Because collateral loans use your property as security for the loan, they are easier to qualify for than traditional bank loans. This is because there is less risk involved for the lender since they can take possession of your property if you default on the payment agreement;
You can get funding quickly: Another benefit of using collateralized loans is that they provide fast funding compared to other types of loans;
The process is confidential: Unlike some other types of loans where credit checks, financial records or business plans may be required, applying for a collateral loan is completely confidential. The main underwriting criterion is the value of the assets being used for collateral.
As you can see, collateral loans for jewelry stores can be a great way to get the funding you need to keep your business running smoothly. Not only do they provide you with the funds you need, but they also offer security and peace of mind in knowing that your assets are securely stored in the lender’s vault. Overall, collateral loans are an excellent option for any jewelry store owner who needs financial assistance. As a jewelry store, you have access to valuable inventory that can be used as collateral for a loan. Borro is the nation’s leading collateral lender. Reach out to our team at Borro to get a quote or learn more about an inventory loan.