Only 48 percent of businesses have their own financing needs being met. If you aren’t in that percentage, you should consider getting a business loan.
But what if you don’t have any collateral to put up in exchange for the loan? Thankfully, there are various business loan options available that you can apply for to take care of your financing.
Keep reading to learn how to get a business loan without collateral in order to keep your business running successfully.
Use a UCC Lien
Basically, this is a guarantee that you’ll repay any debt that your business takes on.
These are often requirements if you get a loan with no collateral. This guarantee is necessary so that the bank or the lender makes sure that they get their money back.
However, a UCC lien is different than a standard personal guarantee. This was that the lender can take your business assets if you end up defaulting on the loan. So even if you don’t have collateral, the lender still has insurance as well.
Try Peer to Peer Financing
You may even be able to try P2P lending. However, you won’t be able to find this type of financing through normal financial institutions. Instead, you’ll have to get a loan through an individual.
These are normally unsecured loans, but there are many websites out there where you can connect with someone. Normally, this is all done online, and they usually have shorter terms and higher interest rates.
This is a great way to get a business loan without collateral because these are normally based on your credit history.
Look Into Other Loan Options
There are also other, non-traditional loan options. For example, you can get a long-term loan online.
Online lenders have more flexibility than big banks or credit unions can offer. A long-term loan can even give you all the features and benefits of a traditional loan.
You may even want to look into merchant cash advances. These are loans where the lender focuses on securing your assets in the future, rather than the assets you have now.
Some businesses also open a business credit card if they just need a small amount of money. More and more business owners are getting a business loan without collateral through this method because it’s often based on your credit score.
There is also a lower interest rate associated with this. However, this may not be the best financial decision.
When in doubt, you can also try applying for a small business administration loan with Triad Bank.
Discover More About How to Get a Business Loan Without Collateral
These are only a few things to know about how to get a business loan without collateral, but there are many other strategies you can try.
We know that running a business can be challenging, but you don’t have to figure it all out on your own.
Check out our website for the best insights and tips to keep your business running successfully.
