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When you are starting a business, this is one of the most daunting tasks that can face you when you have no or bad credit: start up business loans. Large banks do not take terribly kindly to new entrepreneurs with no credit looking for low-interest financing, but luckily for you, there are other alternatives that you can explore.
Small banks and credit unions are one of the best places to look for when you either have not yet established credit or have no credit. Start up business loans are issued on a fairly competitive basis, as these organizations do not have the same level of business income that is guaranteed to smaller bank branches. They also tend to offer better interest rates and better limits. Because they are both more competitive and tend to lack the same high levels of overhead that larger banks have to offer, smaller banks and credit unions tend to have more generous levels of distribution for their mortgage products, not to mention lower interest rates. Unless your credit situation is dire, you should have very little difficulty finding a lender in a smaller branch that is willing to assist you with your credit needs, even if you have bad credit.
Start up business loans can also be found through the SBA. The Small Business Administration is a branch of the Division of Commerce that guarantees loans to small businesses, with special programs focusing on minorities, women, veterans and the disabled. The SBA offers its loans through banks (while it guarantees them, it does not have any offices that distribute them.) Check with your local bank to see if they have any SBA loan programs available for your business.
