Ask a GoForth Expert
Finance & Funding
- How can I acquire a business loan and where, if I do not possess the collateral to support it?
Samir DandekarFinance & Funding
Acquiring a business loan without collateral can be a lengthy process and typically requires more information for the lender. Given that it is a high risk loan for the lending institution, it is advisable to do the following:
Prepare a financial plan, which details your business and personal financial information. Tax returns and other financial statements are important to include as well.
Request a lesser loan amount. Unsecured loans are smaller, typically ranging from $1,000 - $50,000. This amount is contingent on your credit score and debt to income ratio.
Consider using angel investors or people-to-people lending options to acquire the loan. This way several investors can invest small amounts in your venture to achieve a fully funded loan.
Meet with various lending institutions - Chartered Banks, Business Development Bank of Canada (BDC) - to determine what is required in order to acquire the loan amount desired.
Consider the use of personal credit cards, however be mindful of the interest rate that applies and use only for smaller loans.
About Samir Dandekar
Samir Dandekar, Asst. VP Business Banking, HSBC, which has designed banking services to cater to the unique needs and challenges of Owner Managed Businesses. Company Website