Most of the time, the bank will ask you to put a collateral when you are applying a loan for your small business. The reason is because you are not yet an established business and they are afraid that you won’t have the funds to pay back. However, if you go online, you will be able to find lenders that are willing to lend a big sum to new startup small business. The following are the 3 best no collateral small business loans.
1. Funding Circle
Funding Circle is a P2P platform that specialized in offering small business loan from $25,000 – $500,000. You can repay a Funding Circle loan in 6 months – 5 years. It is the best option for startups who need additional funds to grow a business. There is no minimum revenue requirement but your business must be in operation for at least 2 years. Your business must also have a credit score of at least 620. The funding process is faster than a SBA loan and you can expect to receive funds within 10 days. It simply take 10 minutes to fill in the form and apply for the Funding Circle loan. Funding Circle loan has low interest rate from 7.4% – 36%.
2. Street Shares
Street Shares is another P2P lender that offers small business installment loans and small business line of credit. The small business installment loan features a loan amount from $2,000 – $100,000. Returning customers can get a loan of up to $150,000. The loan amount that you apply can be up to 20% of your annual revenue. It is hard to find financing for your small business especially when it is newly launched. However, Street Shares can approve loan for small businesses that have only launched for a few months if you already earn more than $100,000. Normally, businesses that get approved for loans with Street Shares have run for at least 1 year old.
Kabbage offers small business loans for small businesses that have less than ideal credit score. You can apply for a loan from $2,000 – $250,000 from Kabbage. The interest rate they charge is quite high and start from 24% – 99%. It also have short loan term of 6 months – 1 year. Kabbage loans have high interest rate because they can release the funds fast. You don’t have to submit any paperwork to get approved for the loan. All you need to have before applying is the business checking account, bookkeeping software, and PayPal. Even if you have credit score as low as 500, you can still be considered for a loan from Kabbage. Kabbage will check things like monthly revenue and number of years in business when reviewing your application.