Get the money you need for your business.
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A business loan will help you to start or expand your business, but if you don't have credit, it can be hard to get a good loan. You may not be able to get as much money as you wanted, and you may have to pay higher interest rates as a result. Still, if you have a good business plan, you may be able to find a lender that is willing to take a chance on your business.
Develop a relationship with a local bank. Large national banks typically have more restrictions than smaller banks that take a more personal approach. Open a business banking account with a local bank and use your account responsibility. This helps you to build your reputation with the bank.
Talk to your bank about a loan. You want a loan that is backed by the Small Business Administration-most banks provide these loans. These are less risky for the bank because the government will help out if you default on the loan. Show the bank representative how you can repay the loan through current cash flow for your business or through the business experience that you have.
Related Reading: How to Start a New Business Loan With Bad Credit
Offer collateral to secure the loan. Without credit, a bank will be wary of lending you money because they cannot be sure that you will repay the loan. If you offer some type of collateral, such as the equipment you will buy with the loan, you become a more attractive borrower.
Build credit with a business credit card. If you are turned down by the bank due to lack of credit, you may still qualify for a business credit card. The credit limit on this will probably be less than you were looking for, but it will help you to build your credit as a business, making you eligible for loans in the future.
- As a last resort, some companies will give you an upfront cash loan in exchange for a certain percentage of your credit card sales. These loans come with high interest rates but may work for you if you don't have other options.
- Register your business with the federal government in order to get an Employer Identification Number. This will allow you to build credit as a business instead of relying on your personal credit history.
Guaranteed Consumer Funding is a type of credit similar to layaway, which allows consumers to purchase items on a payment plan regardless of their credit history.
This process requires signing a contract in which the consumer promises to make all of the payments in full by their due date. In return they will receive guaranteed credit and are...
The SBA Loan Book: Get A Small Business Loan--even With Poor Credit, Weak Collateral, And No Experience (SBA Loan Book: The Complete Guide to Getting Financial Help)
Book (Adams Media)