When it comes to small businesses, having easy access to extra cash or credit in order to get an equipment finance loan is absolutely critical. Depending on the circumstances, there may be a variety of ways for small business owners to get the financing solutions that they need.
According to the experts at Lantern Credit on the topic of small business loans from Lantern with no credit check, “Even with bad credit, it may be possible to secure startup business loans with no collateral that could help you with your launch without putting your personal assets on the line.” Here are five such examples.
Asset Based Lending
Asset Based Lending is when you take out a loan on a piece of equipment, but the equipment itself is used as the collateral on the equipment. This way, if you default on the loan, the lender will just repossess the equipment. You can also choose to lease the equipment, which means that you will ultimately turn the asset over to the lender once the lease is done.
Invoice Factoring
Invoice Factoring is a solution especially when there’s a concern about Client not paying invoice. It’s when a business turns over its outstanding invoices to another party due to potential delays or defaults in payments.
This can result in immediate cash to a business, albeit at a lower rate than if they waited to be paid in full. This can be particularly useful for businesses that have cash flow problems.
SBA Loans
The Small Business Administration offers a variety of available loans to businesses looking to expand or purchase new equipment.
These loans are often not for huge amounts but often come with competitive interest rates. They may also come in the form of loan guarantees that make it less risky for a traditional bank to loan to someone who has a poor credit history.
Peer-to-Peer Lending
With Peer-to-Peer Lending, individuals can make loans to another individual or business. This essentially turns individual lenders into banks or financing agencies, with a variety of websites or brokers acting as a third party that administers such a loan.
Credit Cards
It certainly won’t be cheap, and the rates will likely be very high, but a credit card can be used as a method of purchasing equipment for your business. However, there are many downsides to this method.
First, the rates will be extremely high, and it may be difficult for you to pay this loan off. Second, if you need to use your credit card to purchase equipment, you may not have a high enough limit to afford the credit. Last, you will be personally liable for any such payment – even if your business ultimately declares bankruptcy.
Even with lower credit, you should have a variety of financial options when it comes to paying for equipment for your small business. However, it goes without saying that you want the best deal for you and your new company, so make sure to take the time to research your options and determine what is best for you.
When you own a business, expenses can add up quickly. That is why many business owners opt to use a business credit card. They can help you manage the various business expenses you may encounter like the cost of operation, vendors, supplies, etc. However, being a business owner is a full-time job. Is it a crime to use a business credit card for personal use? To know more check Daily Prosper.
