A business loan will offer the right kick-start to your business and even help in its expansion. If you don't have the required credit history for a business loan, it could be hard to get one easily. However, there are many options to get one easily, such as using collateral for a business loan, applying with a cosigner, etc. In some cases, the business loan amount may not be as much as you need or it may come with higher interest rates. You may still be able to find a lender who is willing to offer you a business loan, provided you offer a good business plan. Here are some of how you can get a business loan without any credit history:
- Use a Co-applicant – While applying for a business loan without having a credit history, you can request a friend or family member who has strong credit history to be a co-applicant for the business loan with you. If you use this option, consider applying for a very small loan amount that will be easy to repay. Over time, as you comply with your repayment norms, it will help to build your business credit history and you won't need a co-applicant in the future.
- Use a Business Credit Card - Building credit is easy if you take a business credit card. If your business loan application is rejected by the bank because of no credit history, you can get yourself a business credit card. Generally, these cards come with a lesser credit limit, but they can help you to build your credit and make you eligible for business loans in the future.
- Go for Secured Loans – If you offer collateral to secure a business loan, there is a higher chance of the loan getting approved. Without a credit history, a bank could be wary of lending you money since there is no surety that you will be able to repay the loan. However, by offering collateral against the loan, such as business equipment, machinery, etc, you will be granted a loan and also start recording credit history.