Where to obtain business credit if a company does not have any credit to start with?

Most business credit is not based solely on the business's credit history although you will have to show at least a year in business to qualify for even the most basic funding (Exceptions are sometimes made). MCAs are one route as Jack suggested, but be ready for sticker shock. These products do not have an interest rate they have a factor (see me for what that means). The same goes for ACH funding or bank statement funding. Both have a daily payback schedule, so if you aren't generating daily sales, they may not be an option. They also base their offers and paybacks on number of deposits or swipes and average daily balance or sales total. The good news on these is that since there is a form of "collateral," your sales, these lenders will work with folks as low as500 credit if the numbers make sense.

A better route may be business credit with a bank. Most companies (including mine) can provide credit quickly (as little as7-10 days). Income verification is an option but not a necessity, it will just change the form of the funding. Despite what you may be told, or some members here will say without substantiation, there is no such thing as non-personally guaranteed funding for the average small to mid-sized business owners. You will have to provide a copy of personal credit and it needs to be good. The good news is that it doesn't have to be the owner necessarily and the lines do not report to personal credit. Credit may also be a better route because of it s nature. You can be approved for $75,000 in credit lines but only need to pay on what you actually are using. With a loan, your payments begin immediately on disbursement. If you can't use every dollar of a loan immediately, then you are just giving the bank the same money back but with interest.

As for adding trade lines to your personal credit or business credit to achieve a "thicker" file, do not waste your money if you want business based funding. They will be ignored by lenders. They will boost your score, but most lending guidelines are not based solely on score. Things like derogatories, inquiries, credit age, and "thickness" all play a role. They can help with personal funding, but this will report to personal credit and thus may be a distasteful option.

It is going to depend on exactly what your business does, who it serves and more specifically what you need the funds for. Retail company can obtain funding based on credit card sales. For a B2B operation, a factoring or purchase order funding company can be of help. you must avoid getting funding for the sake of getting it. Know what you need and stay within your boundaries to avoid over leveraging your situation. A bank loan will be the most economical if you quality, but don't overlook other non-traditional sources as most are designed to fund business growth avoiding ownership dilution and leverage. All will require your personal guaranty and all can be a fit for the right circumstance.

 

To name some:

1. Bank loans: the most traditional way is to obtain credit from banks after presenting your winning/promising business plan.
2. Venture capiltalists: popular with high-tech & internet business
3. Personal financing: own (saved up) money.
4. Family or friends investment.
5. Crowdfunding: using the power of internet based networking with like-minded people.
6. Micro-financing: popular with non-profits, small businesses & sole proprietorships.

Explore with Angel Investors.

The company should maximize its options. If the company is a new in the business, and want to buy something in credit like a shipment. The company can open a credit line with the bank. It is a start to build a credit history. With this credit line, the company can issue deffered LC's. those kind of LCs are safe for the seller because the bank guarantee that the buyer will pay for the shipment in the due date. The bank mighttake a cash margin to issue the LC; however, it is a good start to build a credit history.

Well explain and propose the business strategy and idea to potential investers, of course if idea of business is attractive and is having minimal risk then Business will definetly attract potential investors.

Banks and other financial institutions, also  some government sponsored agencies.

Collateral securities : Leveraging your personal assets can help you secure a loan

Government Development bank and agencies 

Business Angels 

 

1. Business credit with a bank

2. Push your suppliers for more credit

3. Personal savings

4. Home equity

5. Venture capitalists

Business angles

venture capitalist

personal loan

bank loan