As a business, you might require at one point to use a logbook loan to get some quick cash to solve your immediate needs. This might, however not be a great idea under some certain circumstances. If you do not have a reliable source of income, for example, you probably might not want to consider a logbook loan as you might end up losing your car. Other financing options, such as invoice factoring may be better as they usually involve fewer securities and other expenses and give cash that can be used to finance your business needs within a short time. Below are some of the circumstances under which a logbook loan may not be worth the deal.
Monthly payments required
When taking a logbook loan you will be required to pay a certain agreed amount of cash every month. If for any reason you do not have a reliable source of income or do not know how to generate the required amount then a logbook loan might not be a good idea as you may end up losing your car. When getting a logbook the financiers always observe whether you are in a position of paying for the loan successfully too. This can be checked if you have a job and if you do what is the pay. In case you lose your income it is always advisable you notify the financier about it and discuss the way forward. Putting the money acquired in a loan on short-term investments is always a good idea. This is because the loan will assist you to pay it off an advantage that can be beneficial to you as a business or an individual.
Amount of the loan extended
Getting a car logbook loan is risking the possession of your car and the amount of the loan should be worth the risk. Getting a loan of 20% the market value of your car, for example, is not a deal worth risking. At Momentum Credit, however, we offer loans of up to 50% the value of your car and can offer a loan of up to 5,000,000.00. This, in the long run, can finance all your needs and is worth as it is an amount that is reasonable compared to the value of your car. Other financial institutions might, however, give you a loan of only 250,000.00 a loan that may be very insignificant compared to the worth of your car. This amount might not finance your business needs in the long run and might make you suffer a big loss in case you are not able to meet the monthly payments required.
Comparing other options
Not every situation require the use of a logbook loan. When understanding the benefits of other financial solutions and seeing how practical they can work, you might as well find another better way out. Invoice financing, for example, reduces your risk as you do not need any other security apart from the invoices required. In invoice factoring, in fact, you do not have to make any monthly payments as well as you use your invoice to get the cash you need. If you do not have pending customer payments, however, you might not find it a viable option. Other financing options such as Advance payment guarantees might also be of great assistance especially if bidding for construction jobs.
Although a logbook loan can provide a quick solution to your financial needs as a business, it might also make you lose if you are not very careful. Checking in the interest of the loan, the amount of months that are required to pay the loan is also important. When you evaluate all the expenses of getting the loan you also need to consider the time required to process the loan and the transfer procedure used to change the ownership of your car. This calls for convenience and services that are fast. At Momentum Credit we process the loan in an easy and deliver within 24 hours. This makes it a great option especially if you find your business in need of quick cash that other options are not able to meet.