6 handy terms every entrepreneur should know

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Running a business requires a constant learning curve, it doesn’t matter if you are just starting or you have been in the business for long.

For you not to get too overwhelmed, it’s advisable to take each stage of your business step by step. During this process you will learn to the rudiments of the business.

Well as an entrepreneur, there are some basic terms you should be familiar with, these terms will guide you in making some crucial decisions among other things.

1. Unsecured loans

In plain words, unsecured loans are loans that are not backed up by collateral.

As a lender, it poses a higher risk on you, a good example is the credit card

The top three unsecured business loans of 2019 are:

  1. Kabbage
  2. OnDeck Capital
  3. LendingClub

To get unsecured business loans, follow these four steps:

  1. Do your research on the best unsecured business lenders.
  2.  Check to see where your credit scores stand.
  3. Get your application ready.
  4. Read the fine print on your unsecured business loan offer.

2. Secured loan

This is a form of loan that requires a form of security to back it up, the security could be in form of an asset.

In the event that the enterprise cannot pay up for the loan obtained, the lender can then claim the collateral and use its fair-market value to offset the unpaid balance.

3. Tax lien

A tax lien is a form of security interest imposed on a property to secure the payment of tax on that property

Tax lien is imposed when a tax is refused to be paid after the due date

The government can not only withhold your assets for liquidation to resolve the tax debt, but they can also charge you on the amount you owe.

4. Personal guarantee

This is a term brought in when an individual doesn’t have a collateral to obtain a loan, you will be asked to sign a document of personal guarantee.

This means that you are responsible for the loan obtained and in the event that you cannot pay up for the money lent, you will be held responsible for it

5. Line of credit.

Line of credit is a platform where as an entrepreneur you can get cash from when capital is needed.

This platform is short term with quick access to the cash.

6. Fico score

The fico score is a three-degit number ranging from 300- about 900

Its a type of credit score used by credible lenders, if your fico score is high, you will be accepted but if its low you won’t.

Komolafe Timileyin is a passionate entrepreneur that loves to solve entrepreneurial issues. He is also a blogger and an upcoming Engineer.

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