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Small Business Loans: How To Get One Without Credit History

December 28, 2021

Starting a new business is not always a walk in the park, especially with funding everything from the get-go. One way to finance your start-up’s initial expenses, such as equipment and inventory, is by getting a small business loan. 

There are different loans you can apply to for your business. Although most of them usually require credit checks, there are some loans you can still apply for if you have no credit history. Read on to learn more about them.

  1. Lines of Credit
    Having this type of business financing is like owning a credit card. It gives you a specific amount of money you may use as long as you go over your credit limit. Business lines of credit are also flexible. Compared to other business loans that give you money in advance, this allows you to only take what you need. Besides that, you will only have to pay the amount you’ve used, plus the interest.
  1. Term Loans
    With term loans, you can get a lump sum of money that you have to pay with interest for a specified amount of time. It can vary depending on how long you need the money, either for less than a year to one year or up to 5 years or longer. Term loans typically have lower interest rates, but the amount you can borrow still depends on your lender's terms.
  1. Merchant Cash Advances
    Similar to term loans, merchant cash advances provide you with cash upfront that you can use for your business. But, instead of paying monthly with interest, they get the payment from your future earnings by withholding an amount from your credit or debit card. Here, your credit history is not the determining factor in getting approved since the repayment comes from future sales.

Speak to One of Our Financial Advisors
While getting a small business loan with no credit history is not impossible, it’s crucial to do research beforehand. If you need more help, reach out to a financial expert. Contact our team of reliable advisors, formed by Mark Lamkin, at Lamkin Wealth Management in Louisville, KY for more information on small business planning, comprehensive business continuity plans and more.