Working a conventional 9 to 5 job isn’t everyone’s cup of tea. It involves you sitting behind a desk everyday and constantly trying to satisfy your boss. If the company is under stress, you will be too. If it prospers, hopefully so will you.
However, having said that, a typical work life does not reward you a daily degree of flexibility. As a salaried employee, you must work extremely hard to catch the attention of upper management and earn a promotion. Being your own boss is an appealing notion.
This is where your own business comes in handy. Business is more of a lifestyle than a profession that requires devotion and struggle. Starting a fresh business requires no age limit and no educational degree. All you need is a solid business plan, some stable capital and you’re good to go.
For most young entrepreneurs, a startup can be difficult to begin. This can be due to no access to capital or to a weak business plan. While we cannot really help with reinforcing your business plan, we can definitely suggest how you can raise capital.
Use Title Loans to Fund Start-up
The working mechanics of a title loan are like that of a traditional loan. But the catch is that your property title or car title acts as the collateral.
Basically, a title loan is a secured loan where the lender such as https://toploancompanies.com/title-loan-lenders/ puts a lien on your property or your car and keeps the copy of documents until the loan is returned with an interest sum. It is an excellent entrepreneurial opportunity for individuals to launch their startups especially when the capital is unstable.
Hence why most entrepreneurs turn to title loans to run their fresh business seeking solid returns on their investment. If the loan is paid back due time, everyone goes their merry ways. But in case the borrower fails to return the loan, the lender can possess the title, sell it and equalize the debt.
How to properly utilize your title loan for a startup
To run a successful business, it is very important to have a solid business idea. With a perfect game-plan sorted out and the best business idea finalized, you can claim a title loan as a capital. But remember, your capital is a loan that you must return it in due time so it’s very important to secure monthly payments to the lender while sensibly investing the loan in to your products or services.
The average loan term is typically of 30 days. In case you’re unable to pay, the lender can extend the loan to another month increasing the interest rate and the fees. But the law regarding title loan varies from state to state. Before taking the title loan, it is important for you to educate yourself and make yourself aware of your state law.
Rules and regulations vary from state to state and company to company providing these title loans. In case of car title loans, the lender may or may not keep the car you have surrendered as a collateral, until you return the loan. Title loan businesses are required to be certified in many states.
Know what you’re competing against
Ask any successful business owner and he’ll tell you one thing: know your competition. Running a business with no goals or aims is just like walking into a golf field blindfolded. For a successful business, you must always be two steps ahead of your competitor to maintain dominancy.
Benefits of using title loan as a capital for your startup
Title loans for a startup can be advantageous in many ways such as:
- Fast application process
Unlike a traditional bank loan, a title loan is quicker to claim and does not specifically require any document for proof. Hence, the hurdle of going through all the paperwork is saved. All that is required of you is to provide the title of your vehicle or property that shall act as a collateral for the. The loan usually gets approved within 24 hours and is irrespective of applying online or physically.
- A quick and easy way to repay your loan
The lending companies provide an in-depth explanation regarding the complete process of paying back the loan and its rates etc. There are many easy strategies you can use to repay your loan.
Many companies provide flexibility in the loan term period and renewing the loan term. Using specific strategies, title loans are also faster to repay. Loan amounts are covered quicker regardless of the size. Moreover, if you have thought your startup through, the profit can be utilized to easily repay the loan faster.
- Cheaper than traditional loans
Title loans are cheaper than a traditional loan. This is usually because you share the title of your property or vehicle with the lender and they have keep the collateral as a security.
Therefore, in case of worst case scenario, the lender can utilize the collateral property or vehicle to clear the payment of the loan. Having this security affirms the lender’s trust and often interest rates are decreased depending upon the value of the collateral.
- You can still use your property/vehicle
We mentioned earlier that the lender may keep your car until the loan is returned-but that is hardly ever the case. Hence, the best part of utilizing the title loan is that the collateral property or the vehicle can still be used by you.
The company however shall assess the value of the collateral property or the car regularly to make sure that the value of your collateral hasn’t depreciated. The lender however will keep the stake in your property/car and duplicate keys/registration. The keys and title will ultimately be handed over as soon as you repay the loan amount.
Is it really worth it?
All such schemes have pros and cons. To be on the safe side, it’s important to understand both side of the coin.
- Some companies intentionally target those with an unsecured secondary form of credit. Young entrepreneurs must be aware of such controversies.
- In case your business fails to float, you will be unable to make monthly payments and will ultimately lose your property or the vehicle.
Considering these factors, if you have a solid business idea or a secondary credit source, a title loan may be a good idea since the risk percentage is not relatively high.
A title loan is a good option that can be used as a capital to start business and get it going until you stabilize. Since you’re handing over the title of your property/vehicle, it’s important you must have a solid idea for your startup keeping in mind all the aspects such as repaying the loan via monthly payments.
With a good business pitch, the loan can easily be returned with the profit generated while maintaining dominancy over rivals and gradually increasing the demand of your product or service.