For the most part do banks always require collateral to get a small business loan?

Answer 1

Every case is different. You will want to be prepared to submit a Business Plan, Bank Records, allow credit check, etc.

Answer 2

No. Because now what you consider a small business loan they don't even consider it a smalll business loan they just consider it a line of credit.

A small business loan is more like 300,000 to a 1,000,000.

A lot of banks like Wells Fargo, US Bank, etc. will give you a line of credit in the form of a Credit card for the amount most people think is a small business loan. But unlike a credit card the interest will be more like 8%.

So if you need less than $100,000 then go in with a well organized business plan and they will go off your credit rating and also what your income return will be from the business and they will give you credit.

Then you just use the credit card to buy what you need when you need it.

Over $100,000 they will probably want some form of collateral.

Bad Credit ? Yes, collateral is KING !!!

Answer 3

In general the correct answer is YES and NO.

Very small business loans (Microloans) under $35,000 required NO COLLATERAL.

Microloan is a special government backed program. For more information see resources below.

And if you want truly unsecured small loan apply for a business card or personal unsecured loan - see resources below.

When the answer is YES. Collateral not always means your house.

The following formula is to calculate business collateral:

Collateral = Commercial Real estate value*0.8 + Equipment value *0.5 + Inventory *0.1

In some cases you might be asked for additional collateral (your house). The collateral value of your house is equal to:

House value * 0.8 - Mortgage Balance.

Business IS collateral too. If we are talking about existing business - current revenues are collateral too. The value of revenue collateral is hard to explain in short answer. Sorry.


Sincerely,
Marina Lando
President
Business Loan Quest
http://www.blquest.biz

Answer 4

YES!!! We do. Unless you have amazing credit, we do require collateral for any loan.

Answer 5

Small Business have 80 - 95 % failure rate first five years.
They want their money , simple.
Do the biz with cash that is what most successful biz do.

Answer 6

i think of to all banks and lending or financing monetary business enterprise do no longer settle for contracts perhaps approved contracts and settlement between the monetary business enterprise and your organization contractor will pay the loan promptly ..if the monetary business enterprise and your contractors will agree

Answer 7

To have some guarantee that they can recoup some of what they loan you if you go belly up. lol

Answer 8

Yes.