How to Get a Small Business Loan With No Money

Small business loans usually require collateral.

Whether you own your own business or are just starting out, the need for a business loan can arise for many reasons. Business loans typically require collateral, which is something of value that secures repayment of the loan. This is sometimes money in the form of cash or securities. But even if you have no money, there are some ways that you can get a small business loan.

Instructions

1. Apply with your local bank. Even if you do not have money, you may be able to offer your business as collateral for a small loan. Chances are, if you have assets within the business, or accounts receivable, for example, your bank will be willing to lend you the money you need. You can also use other assets, such as your home, as collateral.

2. Find someone who is willing to co-sign a loan for you. A family member or friend who is in the financial position to help may be willing to co-sign a loan with you. Drawing up a solid business plan to present when asking for a loan is essential; it lets your prospective lender know that you are serious and have thought your business ideas out thoroughly.

3. Ask for a personal loan from a family member or friend who is financially stable. Again, be prepared to show them your business plan and let them know how you will be able to pay the loan back.

4. Look into companies that lend money to small-business owners, such as the U.S. Small Business Administration. These agencies are geared toward helping businesses get started, by offering valuable information about loans, grants and financial assistance.

5. Apply for a credit card advance. Even if you don't have any money, if you have a credit card, you may be eligible for a cash advance. Remember, a cash advance fee is generally high, so borrow only the amount that you can repay with a higher interest rate.

6. Apply for a payday loan. You do not have to have money to receive these types of loans, but you will have to be expecting a paycheck or other form of regular income within the month. These loans do not require a credit check or collateral and are offered locally or online. If you need just a small loan, you can apply for amounts up to $1,500 from many places.

   A payday loan should only be used a a last resort, as the finance fees can be high. Many people find themselves deeper in debt after receiving this type of loan because of the fees, so read all the fine print carefully before applying.

References

• Small Business Administration: General Information