Your Questions About Loans For Small Business With No Credit

Nancy asks…

How can I get a small business loan? I have good credit but little cash or assetts?

I am looking into buying a small business just outside of Denver, Colorado but I have no idea where to start as far as getting a loan. I have good credit but would only be able to come up with $2,000 -$3,000 up front cash. As far as assetts, I have virtually nothing. Is a business loan even an option in this situation? I need a loan for about $230,000. The business I am looking into buying is well established and very lucrative would this factor into the loan situation?

admin answers:

The truth is that it is difficult for a startup business to borrow money as a small business loan — especially without assets and without experience in the business.

However, if you’re applying for a loan and if it is a big amount, banks and even the Small Business Administration may consider the following factors:

- A business plan explaining what the business is

- Your background and experience in the business — in my experience, this is KEY in the eyes of the bank because they want to make sure that you know what you are doing and that you can make the business work. If you don’t have any experience with the business, have someone on board that knows the business to give banks assurance that someone will guide you

- Your credit factors because it shows your dependability and how well you handle credit. They will do a credit check on you and poor credit history may be frowned upon, or even reason for the disapproval of your loan application

- Your collateral. Banks, even SBA guaranteed loans, want the borrower to show collateral. They want to be guaranteed that somewhere somehow they can get payment from you

- Condition or terms of loans. Banks would want to know three important things: “How much money are you requesting? What will it be used for? And For how long will it be needed?” Banks oftentimes prefer to approve loans for items that can be identified, has lasting value, and can be repossessed and sold if things fail.

You have a very tight situation when you only have very little money and no assets. However, I suggest you talk to your local Small Business Development Center. They may be able to give you lists of banks and financial institutions in your area who may be able to give you a loan — even if it’s not a full amount. Who knows, one of the smaller local banks would be willing to take a risk on you.

Here is an interactive map of Colorado — click on your location to find the nearest SBDC and ask for their help on how you can get the financing you need

Paul asks…

Can I get a loan for a small business without credit?

I have no credit, I still live with my parents and I have a business plan. It seems hopeless.

admin answers:

Get a SBA loan:

The SBA has various types of small business loans. The Basic Loan Guaranty program is designed for those small businesses who will not get the loans from the lenders. These loans are disbursed by the commercial lenders with SBA acting as a guarantor. The Certified Development Company (CDC) Loan Program is ideal if you want to buy a property or machinery to expand or modernize your existing operations. This is a long-term loan with a fixed-rate of interest. You need to contribute 10% of the amount as equity. The micro loan program is a short-term loan with limit not more than $35,000. You can use it as a source of funding for working capital and inventory or non-profit childcare centers. However, you cannot use it to clear your existing dues. The loan prequalification program allows you to get your application reviewed and approved by the SBA before going to lenders. The limit for this program is $250,000.

Sharon asks…

where can i get a small business loan with a credit score of 600.?

I have collateral but I cannot seem to get approved anywhere. I have been in business for 3 years and now that my business has grown, I need more working capital to one up my competitors. I feel so desperate because if I dont get some working captial i am going to loose out on some major opportunities and no longer be ahead of my competitors. Even though my company is doing fine now, it could put me out of business.

admin answers:

Hi, you should try a merchant account cash advance. It’s like a loan but it’s actually NOT a loan.

You don’t need good credit OR collateral. Basically, you can borrow up to $200k and your pay back by a portion of your future credit card receivables.

Check out and click on the cash advance tab for more details. Or you can contact me for a number to call. Hope this helps.

Powered by Yahoo! Answers

Comments are closed.