How to Get a Business Loan without Needing a Cosigner
When you have bad credit, you will most likely be required to come with a cosigner – to bring some strength to your business loan application. However, there are times when it is simply not possible, and you’ll just have to find a way to get the loan without asking someone to sign with you.
You may not have someone to sign for you or you simply want to take full responsibility for the loan. Regardless of your reason, you will have to prove to your lender that you are trustworthy and that you’re good for receiving the loan.
The Basics of a Cosigner
In order to decide whether you’ll be able to repay your debt or not, your lender will evaluate your application and your financial situation. Basically, there will be two things that they’ll be looking at: your income and your credit score. If it looks like you might not be able to handle things on your own, you might be asked to bring in a cosigner.
The cosigner is basically someone who agrees to pay your debt if you fail to do so – so they’re just as responsible for the loan as you are. If you don’t have a cosigner, the lender can only collect money from you; however, having other individuals signing will mean that there is also a backup plan going in case you decide to default on your payments.
What to Do
If you bring someone with very good credit in, you might be able to get your loan right away. However, if it’s not a possibility, there are still some ways for you to get things done. Some solutions may be faster than others but are still worth a try.
- Build your credit: If you don’t get approved because of your bad credit, then you might want to start working on it; make it grow. No matter if you missed out on payments or you simply didn’t have the chance to make it grow yet, you can still do it. It will simply take some time.
- Add more income: Lenders will usually give you money based on how much income you can bring to the table. The higher the income, the more likely you will be to have your loan approved.
- Borrow less: If you want to borrow a large amount of money with a less-than-spectacular income, it’s obvious that the lender might be doubtful of your ability to pay it back. However, if you go for a smaller, reasonable amount, it will no longer seem that difficult to handle.
- Add collateral: Sometimes, lenders just want some security that they can recover their money in case you default. Pledging some collateral will add some security, and you will probably not be asked to bring in a cosigner. Plus, as long as you respect your payments, this should not pose a problem for you.
You can definitely get a loan without a cosigner. It might take some time or some assets to strengthen your application, but it is certainly possible. Contact Business Loans for more advice.