Getting financing as a new business is not easy, and the tricky part is that the start is often when you need it the most. Fortunately, while it can be an uphill battle, it’s not one that’s impossible. There are more options open now than ever for business owners who want to get their business off the ground by may not have had the time to build a credit history. Let’s take a look at how you can get a business loan with little to no credit history.
Look at Alternative Lenders
One of the first things that you should do is look at alternative lenders. These are often non-bank lenders, and they can have different criteria to assess whether a company is healthy enough to repay their loan back.
There are many ways that this can be done. One of the things these services will usually do is check your company’s cash flow and accounts receivable. They will also look at your forecasts and how well your business is run. One example of an alternative lender you could try is advancepointcap.com. They might be more open to working with you if you just got started but showing promise and your numbers are in order.
Look at Invoice Factoring
If you have lots of accounts receivables, then another thing you could do is check invoice factoring. This is when you borrow money against invoices that are due to you at a later date. This can be a great way to manage cash flow issues or if you need more to cover emergencies.
The great thing about invoice factoring is that it’s your clients’ credit that will matter the most. So, if they have good credit and yours is unproven, you will have a good chance of getting accepted.
Reconsider Your Motives
You also have to take a look at the reasons why you want to get a loan in the first place. A lender is much more likely to give you money for advertising than if you need to get a ping pong table for the break room. Lenders want to know that their money will foster growth. They want you to be profitable so they can get their money back. So, if your goal isn’t directly contributing to your bottom line, you might have trouble getting financing, no matter what you do.
Start Establishing Your Credit
You also have to make sure that you are actually building your credit in the meanwhile. You need to get your D-U-N-S from Dun & Bradstreet immediately if you haven’t already, and start getting active. Open accounts with suppliers and service providers who will report activity and treat these accounts like gold, as they could have a major impact on the future of your business.
If you were looking for ways to secure financing with no or little credit history, there are things you can do. but have the patience to start building your credit by making responsible choices.