Lending money can be a risky business, which is why most traditional lenders require borrowers to put up collateral for a loan. Collateral is simply a valuable asset, such as your house, car, or even a savings account in your name. In the event you’re unable to pay back your loan, collateral provides insurance for the lender; they can seize and liquidate it to recoup some of their loss.

You may be a financially stable and qualified small business, but the economy can be fickle. Most lenders don’t want to carry the risk of a borrower defaulting on a loan, which is why they ask for valuable assets to secure your financing.

If it’s time to get funding for your small business but you don’t have collateral to secure a business loan, you may think you’re out of both options and luck. Know there are financing options outside of traditional loans, and you don’t have to settle for incredibly high rates or unfavorable terms to get them.

Business credit cards

A business credit card is a great option for a small business owner who is getting established or wants to have a more instant source of funds for the unexpected. Business credit cards are great supplements to any other financing you may have in place for your business, with a lot more flexibility.

Bonus: The right credit card is also a great umbrella for your business in case of a rainy day.

Loans from online lenders

When the world is at your fingertips thanks to technology, shouldn’t there be better options for finding financing for your small business? Online lenders have become more mainstream over the past few years, giving business owners more accessible options to fund their dreams.

No two businesses are alike, which is why term loans from online lenders are structured to fit the needs of your business, whatever they may be. By design, business loans from online lenders are more flexible and fund faster, precisely what small business owners need. You can choose from two types:

  • Business term loans: With a business term loan, lenders advance you a lump sum that you repay over the course of the next 12 to 60 months. Since these loans usually have a fixed interest rate or fixed flat fee, it’s easier for you to plan your monthly repayment rate. The application and funding process for these loans are a lot easier and faster than traditional loans.
  • Working capital loans: Sometimes, you need a quick injection of cash into your business due to unexpected expenses. If you’ve been in business for two or more years, you could qualify for a short-term loan. These are easier to qualify for (usually within a 24-hour period), and the payback period is usually between 3 and 18 months.



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