How to Finance Your Online Business with No Credit or Even Bad Credit

Apr 29, 2020 9:20 PM ET

Starting an online business can be exciting, and many online businesses began on a shoestring budget. The truth is, however, that if you inject some funds from the beginning into your business, you’ll be able to accelerate its growth and avoid some of the issues that affect so many budding online entrepreneurs. You’ll also be able to save time, and use that time to focus on managing your business.

However, not all online entrepreneurs have the privilege of having perfect credit, while others will have no type of credit history whatsoever. This makes getting financing a lot more difficult, but not impossible. Let’s take a look at a few ways that you can finance your online business with no credit.


Look at Alternative Lenders

Know that there are tons of lenders that will be prepared to look beyond your credit score for financing. States like Alabama, for instance, have tons of installment lenders that will look at your employment history and income first when it comes to approval.

You can find installment loans in Alabama via sites like LoanPigUSA which run anywhere from $500 to $2000 that will be repayable over a month. This could be a great option if you have emergency expenses or repairs or need money for inventory. Most companies will offer flexible terms on installment loans and allow you to get your money the day after your approval. So, make sure that you consider the option if you still have a steady source of income.

Ask Friends and Relatives

Did you know that over 50% of all business owners got financial help from a friend or relatives at some point? So, don’t be afraid to ask people around you if they’d like to help. You could even offer equity in your business in exchange for funding.

However, you have to treat this like you would any other loan, meaning that you should agree on terms and have them down on paper, respect payment deadlines, and come prepared when you ask. You should have a clear business plan that you can lay out to let them know where their money will be going, and the chances of them seeing it again.

Look at Web-Based and Micro Lenders

You should also look at as many options as you can, and consider online lenders. Many lenders online will offer loans to business owners with bad credit, as long as they can show that their business is profitable. They might look at things like your cash flow for instance, or your accounts receivable. Not only that, but these nonbank lenders will usually report activity to report bureaus as well, which will allow you to build a credit history in the meantime.

These are only a few of the options available to you if you have no credit or bad credit. Whatever you do, always make sure that you treat financing responsibly, and use it as an opportunity to build a name for yourself.

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