In order to secure a small business loan, most traditional lenders need you to prove your ability to repay the funds by providing personal assets such as your home, car or savings as collateral. Securing the loan may offer lower interest rates, larger loan amounts or better terms than unsecured loans, but not every business owner has collateral to put up, especially if they have bad credit.
Small business owners can look to get financing for their business from alternative lenders that do not require collateral in order to secure a loan. Instead, these alternative finance companies analyze the revenue history of the business, and then, based off bank statements and credit card sales transactions, decide whether to loan to a business or not. In other words, even if you have bad credit and no collateral to put up, but your business has a positive cash flow, you may qualify for financing from an alternative lender.
Business loans without collateral can be used for virtually any business-related purpose such as expanding operations, purchasing new equipment, stocking up on inventory or even just increasing working capital. Moreover, most industries can apply for a collateral-free business loan since many alternative lenders do not limit which companies they lend to.
At Bizfi, utilizing proprietary technology, our revolutionary lending platform allows business owners to quickly apply for multiple lending products, including collateral-free business loans. Once approved, a business owner could have the capital in their bank account in as little as 24 hours, allowing them almost instant access to cash flow.