How to get a Business Loan with no money

Trying to get a small business loan requires research and patience. Funding, especially SBA-backed funding, can take months. Understanding your business loan alternatives and not rushing the process will help you apply, get accepted, and save time and money. In this article, we will discuss how to get a business loan with no money. Here are steps to apply for and get a small-business loan:

1. Determine your company's loan type

Your company's loan depends on your goals. In general:

• If you want to finance a significant purchase or business expansion: Traditional term loans are lump sums you pay back over time with interest and sometimes have huge borrowing maximums—SBA loans can reach $5.5 million. Many lenders offer equipment and vehicle loans for developing companies.
• Daily expenses: Business lines of credit provide a safety net by letting you borrow money as needed for payroll or unexpected repairs.
• Startup funding: If you haven't been in business long enough to qualify for a line of credit or term loan, business credit cards and personal business loans may be viable possibilities.

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2. Check your business finance eligibility.

Banks, online lenders, and microlenders offer business loans. Answer these questions to determine which lender will approve your small-business loan:

What's your credit score?

Equifax, Experian, and TransUnion offer free credit reports. Credit card companies and personal finance websites like NerdWallet offer free credit scores. Banks favor customers with strong and outstanding credit ratings, or 690 and above, for low-rate business loans. Nonbank lenders may accept credit scores below that. Online business loans are easy to get. Consider bad-credit microloans or small-business loans.

How long have you operated?

Online loans require six months to one year of business, while bank loans require two years.

Do you make enough money?

Business loans and lines of credit often require $50,000 to $250,000 in yearly revenue. If your revenue is too low, seek business credit cards or SBA microloans.

Loan payments?

• Consider your cash flow and annual revenue to determine how much you can pay toward loan repayments each month.
• Your income should be 1.25 times your expenses, including your increased payback amount.
• Say your business earns $10,000 each month. 1.25 times $8,000 costs. You can afford a $1,000 loan payment if you pay $7,000 in rent, payroll, and other expenses.
• Make sure you have enough cash flow to make daily or weekly payments to some internet lenders.

3. Prepare your application

Small-business loan lenders may request various documents. Most likely, they want:

• Business details. These include your business's name, address, and tax ID, as well as more detailed documents. A lender may require a business plan or loan proposal.
• Personal and commercial financial statements Profit and loss statements, tax reports, and business and owner bank accounts may be included.
• Owner information. You may require names, Social Security numbers, and addresses for anyone who owns 20% or 25% of your company, depending on the lender or loan.
• Your collateral. Loans may need collateral like real estate or equipment. You should describe your collateral and its value. An impartial auditor can value your collateral before asking for a company loan. Online loans require less collateral than loans from banks and SBA lenders.
• Guarantee. Small-business loans usually require a personal guarantee. If your firm defaults, you must repay the debt with your personal assets. Other firm owners may have to sign personal guarantees. SBA loan application standards may help you decide. If you have what the SBA requires, you should be ready for any lender.

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4. Apply for a business loan

After everything is in order, the lender will decide how to apply for the small-business loan. To qualify for financing, Fundbox lets you link your business accounts online.

Banks and credit unions require in-person or phone applications. Bank of America supports online applications for some items, like business auto loans, but requires in-person or phone appointments for others.

Before submitting your company loan application, have an SBDC professional review it. These business professionals can verify that your application has everything the lender requested in the right format. By minimizing back-and-forth, the lender will make a decision faster.