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How to Get Small Business Loans with No Credit or Collateral


Navigating the financial landscape of a small business can be intricate, especially when it comes to securing additional funds. Obtaining a loan from a financial institution or a licensed moneylender is a common strategy, but what happens when you lack a strong credit score or collateral?

This predicament is more common than you might think, but fortunately, alternatives are available.

In this guide, we will walk you through obtaining small business loans with no credit or collateral. We will explore loan options that don’t require collateral, delve into the impact of a poor credit score, and provide helpful tips on improving your credit status. We’ll also share loan opportunities specifically designed for those with less-than-stellar credit scores.

Loans That Don’t Require Collateral


Collateral, something pledged as security for loan repayment, may be unavailable for some borrowers. Despite the potential risk, here are options to consider:

  1. Merchant Cash Advance (MCA):

    • An advance based on future revenue projections.
    • Lenders provide a lump sum in exchange for a percentage of future credit and debit card sales.

  2. Invoice Financing:

    • Borrow against outstanding invoices.
    • Borrowing limit typically up to 90% of company receivables.

  3. Guarantor Supported Business Loan:

    • A strong guarantor with a healthy credit history and private property ownership can increase the likelihood of loan approval.
    • Guarantor’s financial stability and property ownership can positively impact the borrower’s financial profile.

Impact of Bad Credit


Understanding the role of credit scores is vital. In Singapore, credit history is scored from 1000 to 2000, with 1000 indicating weak credit and 2000 reflecting an excellent track record.

Tips to Improve Credit Score


Maintaining a good credit score is an ongoing process. Strategies to enhance your credit standing include:

  1. Prioritize Timely Repayments:

    • Defaulting on payments can severely impact your credit score.

  2. Mind Your Credit Limits:

    • Spending within limits shows responsibility and effective financial management.

  3. Wise Use of Available Funds:

    • Utilize funds responsibly, aiming for a balance between credit use and maintaining a healthy savings account.

Building back your credit score takes time, but it’s worthwhile for future cost savings through lower interest loans.

Securing a business loan without collateral or a strong credit score may seem challenging, but various pathways are open to you. Explore different loan types to find the one that aligns best with your specific needs. It’s entirely possible to secure the right loan for you, regardless of your current credit score or asset holdings.

FUNDREGO provides access to various business loans. Consult with our financial experts for help finding the best loan for you or start your application here. If traditional business loans are not an option, consider personal loans for potentially less stringent criteria and more flexibility.

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