Entrepreneur Tips and Discussions

Loans I Could Qualify For With Little Collateral/Credit History

I am starting a small business and need a $70,000 business loan. The catch? I have practically no collateral. My credit score is fairly good above 750 but I’ve only owned a credit card for around two years and don’t have much other credit history.

Do I qualify for anything? I know everyone probably says this but I have a solid business plan, a job that pays decently well and not many expenses. Even without the revenue from the business I could likely pay back the loan within 2 to 3 years. What should I be looking into if I am going to go down this path?

One thing to note is that my business partner has quite a bit more collateral than me and also has a much longer credit history. Because we are not equal business partners I am hesitant to ask her to cosign. Are there ways to cosign unevenly where the business still benefits from two people signing yet if we default she is not as affected?

I am just very new to all of this so I would appreciate any insights.

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3 replies on “Loans I Could Qualify For With Little Collateral/Credit History”

Go and ask your bank.

Small business lending has really tightened up right now.

But no one can say for sure except a banker looking at your info.

Any partner who holds 20% and above will be guarantor of the loans and lender asks for collataral based on the loan amount.

You’ll likely have to sell equity instead of a loan.

Your personal guarantee isn’t worth anything because you have no assets. Your partner’s personal guarantee is worth a lot but she won’t give it. Even if she did, the return on the loan is too low to make it worthwhile.

The one thing you could try to do is make your loan non-dischargable in bankruptcy, like a student loan. I’m not sure if that’s possible or permissible.

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