Working Capital: Is It Possible With No Collateral?

It almost goes without saying that the majority of small and emerging business need working capital. The challenge comes when trying to secure capital in the form of loans from traditional lending channels, such as banks. Most lenders want to see excellent business credit ratings and a long history of financials, which can be prohibitive for newer and smaller business operations. If entrepreneurs are not met with an immediate denial, they are required to put up a sizable amount of collateral against a loan request. Many entrepreneurs end up foregoing bank loans completely, and finance their businesses with their own savings, which is incredibly risky. Fortunately, there are working capital options available which require no collateral whatsoever.

Unsecured Lines Of Credit

For businesses that have been up and running for under two years, there are unsecured lines of credit, which require no collateral. The requirements to access these lines of credit focus more on the overall profitability of a business, along with receivables. As a new or small business grows, these lines of credit can be reconfigured for higher spending limits. Unsecured lines of credit are one of the little-known working capital tools available to emerging entrepreneurs.

Merchant Cash Advances

Merchant cash advances (or MCAs, for short) give businesses an advance in working capital without requiring collateral. Unlike traditional bank loans, business credit ratings are not compromised, and there is no debt placed on the balance sheets. Additionally, MCAs have no particular designation, so the working capital can be used for anything from inventory and supplies, on up to acquiring new equipment, hiring employees, advertising, or anything else the business needs.

Monetizing Invoices

For new businesses, one of the biggest financial dangers is the lag created between invoice generation and receipt of payment. The strain placed on cash flow can cause small businesses to go under or go deeply into debt with banks. By monetizing invoices, businesses can get the revenue they are owed within 24 hours and accumulate the working capital necessary to grow and flourish. Monetizing invoices is a simply sale of receivables, so there is no collateral at stake.

Get The Working Capital You Need

If your business is in need of working capital, and you are tired of the red tape when dealing with banks, talk to CounselPro Lending. Our experts will work with you directly to structure a customized collateral-free solution to help you reach your business goals. Call our offices today at 1-888-292-3322 for a no-obligation consultation.


Related Posts