Lenders often want to see money down to justify the risk of lending to you. More and more lenders are hesitant to loan money without seeing something substantial first. In applying for a loan, you present as much evidence as possible to prove you’re reliable and can repay a loan.
This evidence includes credit score, collateral, and money down. Finding a no-money-down loan can be challenging even if everything else looks impeccable on your application. The truth is, you get better terms with money down. It could lower your interest rate and help with some of the attached fees.
Fortunately, it’s not impossible to find a no-money-down business loan. Remember that the terms won’t be as favorable as if you were putting money down, but there’s a catch for everything.
A term loan is the most common, with terms up to 30 years, and you can borrow into the millions if needed. You can also use the money for whatever your business needs. If your application is up to par, you could be approved without a hefty down payment. What does a good application look like? This means a good credit score, several years in business, healthy revenue, and potential collateral. If you have all these factors, you could be approved without money down since you’re well qualified. Compared to other loans, your interest rates will be lower too.
Often the lender will approve you for up to 100% of the amount of the equipment you want to buy. This is because the equipment itself becomes the collateral on loan. If you default, the lender can just take back the equipment and sell it to recoup the loss. No money down is necessary!
With invoice financing, you can sell your unpaid invoices to a company that forwards you up to 85 percent of the value of those invoices. The remaining goes toward fees. They take a risk as they bank on getting the money from your customers to recover the loan. That said, because you are selling invoices, these are the collateral; therefore, money down is generally not required.
Business Line of Credit
A line of credit is great because there’s flexibility. You withdraw only what you need and then pay interest on that amount. You then pay back the line either weekly or monthly. Once you’ve paid it back, you can withdraw more if needed.
First Union Lending is Ready to Help!
It is impossible to find and qualify for a loan without having cash on hand to apply for it. By talking to experienced lenders like First Union Lending, you can find a business loan to meet your needs. First Union Lending offers numerous financing programs designed with small businesses in mind. Our business loans are fast and flexible, with financing options ranging from $5,000 to $2 million. Call today to learn more about financing solutions to help your business grow and succeed.