Securing a small business loan might not be easy especially if you lack a positive credit history, business management experience, and the collateral of equal or higher value to the required financial assistance.
However, if you become more proactive, you are likely to get lenders out there who do not necessarily require the aforementioned qualifications for you to get a financial boost.
Therefore, in this short article, we are going to enlighten you on the tricks and techniques which you can use to secure a loan for your small business with absolutely no money at your disposal.
Craft an exemplary business plan
People and institutions are always ready to extend a loan even without collateral to any business idea which proves to be viable and promising.
Therefore, having a detailed business plan that depicts a positive cash flow can tremendously increase your chances of securing funding. The business plan should show every facet of the business and clearly address any probable challenge likely to be faced along the operation chain of the business.
This way, it will become easy to convince the lenders to give you a loan even without having security with you.
This one encompasses individuals lending money to each other probably through the website of a lending company that pairs potential borrowers and lenders.
These loans are unsecured and they solely depend on the trust of the borrowers for them to be repaid. In this method, either the lender or the facilitating company will come up with the interest rate as well as the mode of repayment.
When well leveraged, this lending approach can be of great benefit when it comes to funding your business.
Form a Partnership
If your business idea is brilliant and has got high growth potential, you are likely to attract more partners especially those with good credit scores.
You can agree with the partner(s) to secure a bank loan so as to boost the business and agree on the mode to service the loan. In this method, you should have an agreement on the operational modalities of the business so as to avoid future conflicts.
This will include a consensus on who will be actively managing the business and how the profit will be shared out.
This is an umbrella term which is used to describe all the types of lending which take place outside the traditional bank setup. Actually, this type of lending has been growing at an exponential rate not only in Asia, where it is currently a booming business but also in Europe and other parts of the world.
Therefore, you can consider having this type of loan considering it is highly favorable for people without money. You only need to research the lending options available in your area and asses their conditions.
In most cases, you will only be required to provide your identity information which of course will be required for the purpose of follow-up in case there is loan defaulting.
Family and friends
Requesting some Cash from family and friends can be another great way of outsourcing some funds without the need for collateral.
You can explain to them your poor credit history and most probably they will be ready to boost you. However, you should be ready to part ways with some freedoms such as absolute control of the business as some of the family members or friends might request to be included in the management process
The above techniques and options can highly assist you in funding your startup or expand your existing business especially if you do not have ready money.
What are you doing to get a business loan even if you don’t have any money?