As a small business, it’s important to grow. In order to grow and elevate your business, it’s vital to stay ahead of your competitors by differentiating yourself, and what you offer. This is where most business owners require the help of fast business loans.
There are many types of business loans, though, and if you’re looking for one with no collateral, you’ll need to know what to expect.
What Is No Collateral Financing?
The whole point of no collateral financing is that you, as the borrower, don’t need to put up any of your own assets to secure a loan.
This is in contrast to collateral loans, wherein you would need to provide something with high value to the lender, like real estate or a vehicle. This collateral would be seized if you default on your loan.
You will need to provide a personal guarantee, have a bank lien against your business’ assets, or potentially both. You’ll likely also have a higher interest rate than other loan options. However, no collateral financing also means that you get your cash quickly, even if you don’t have anything to offer in return.
Business Loans With No Collateral
There are multiple types of financing that don’t require collateral, all of which might be a good option for your business.
Line of Credit
You can apply for a line of credit, with the only requirement being that you’ll need to convince your lender that you can pay back your funding. This means having a credit score of at least 600, a history of repaying your loans, and some history that you have been in business for some time and with a minimum amount of revenue.
Merchant Cash Advances
You can also get a merchant cash advance. This is when you receive some working capital now, but you have to exchange that for a percentage of your daily or weekly credit card sales.
You’ll do this until you’ve met your terms, but for this type of loan, make sure you have a lot of credit card sales to begin with. You’ll also want to be sure you can handle the potentially higher interest rates.
This is the most popular type of loan for starting a business, although you may end up having to provide some collateral for larger loans. If you’re just looking for a loan of less than $25,000, you may not have to pay any collateral. You’ll need to show that you can pay your loan back though and that you have a good credit score.
There is also the option of invoice factoring. You’ll just sell your outstanding invoices at a discounted price and get some cash in return. Your lender will then send you the rest of the invoices’ value once the customer makes their payment. If you have a long accounts receivable period, this might be perfect for you.
Online Business Loans
There are many good reasons to look at online business loans like ours. One of the most significant benefits is that the applications are quick and easy. In addition, online loans require much lesser documentation, and the process is a lot more straightforward.
Once your loan has been approved, you receive your funds quickly too. All credit types are welcome, and all we need is simply 3 bank statements from you. Borrowers with bad credit will be relieved to know that they can still be considered as we aim to serve all business owners.
If you’re just starting your business or wanting to scale your operations, you’ll need some working capital to help you get going. A no collateral financing option might just be the best option for you then. You can apply quickly online even if you don’t have great credit, and can start using your capital once you’re approved.
Give us a call today to find out more about our hassle-free online business loans with no upfront fees!