Entrepreneurship and Vision
What exactly is an unsecured consumer loan? An unsecured consumer loan, as it relates to consumer contract financing, is simply a loan that is provided without a tangible asset to secure the loan. Generally speaking, traditional lenders, such as banks like to have something to “repossess” if a loan goes bad. Unsecured consumer loans, by definition are not collateralized by a tangible “widget”. Therefore, the loan is perceived, by traditional financing sources as being higher risk by its very nature. Traditional funding sources typically feel uncomfortable in this environment because their lending parameters are quite defined and conservative.
For example, if a consumer wants to purchase a tractor, or a boat or a recreational vehicle or a car or truck, such loans can be procured through traditional financing sources. A bank will understand that if the payor is delinquent in their payments, there will be a truck, or an RV or a boat to repossess, which can be sold to recapture part of, if not all of the loan amount and so mitigate against the percentage of loss.
However, if you are in a business which does not sell a tangible asset, how are you to find financing for your customers? What if you are providing LASIK surgery, or culinary art classes, or radial keratotomy, or college planning services or orthodontic procedures? There is nothing for a traditional funding source to repossess if the loan goes bad. However, non-traditional funding sources specialize in these and many other types of unsecured consumer contract loans.
Any given consumer with good credit may be able to go to a bank and acquire a loan for their truck; but, when that same consumer goes to the same bank and tries to get a loan for a culinary arts class they will very likely discover that the bank is not interested in dealing with them.
If you are a business providing a viable service to your customers, and if you would like to provide financing both for your “A” credit customers and “B” credit customers contact Access Funding Center.
If you own your own business and are looking for consumer receivables financing (financing for consumer notes,consumer contract financing, or retail installment contract financing) it will be to your benefit to be aware of exactly what type of financing you are looking for as well as being able to provide general information to enable a consultant to direct you to the proper funding source.
Isaiah Berlin once tried to divide all thinkers into two categories. In so doing, Berlin quoted a Greek poet by the name of Archilochus. Archilochus wrote, “The fox knows many things, but the hedgehog knows one big thing”. By this Berlin was trying to say that all thinkers could be understood in terms of being placed in one of two categories: those who saw the world through a single defining idea (Plato, Pascal, Hegel) and those who drew on a wide variety of experiences, and did not see the world in terms of one overriding single idea (Aristotle, Shakespeare, Balzac). However, in understanding Tolstoy’s view of history as expressed in “War and Peace”, Berlin asserts that Tolstoy is by his very nature a fox; but, a hedgehog by his convictions.
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