It is really unfortunate that many talented individuals with bright and workable business ideas are constrained in getting resources to finance their business due to "less than perfect credit."

In our experience, any kind of "not so good, not very good" remark on your credit report is just plain "No Good" to any financial institution and any attempt to apply for any kind of loan would just be a futile attempt.

To help you assess your credit standing, you may want to get hold of your credit score. Previously kept secret by lending and credit institutions, credit bureaus and other organizations are now offering them to the public. Equifax is offering FICO scores to consumers for a fee. Eloan.com  https://www.eloan.com/myeloan/viewscore?linksrc=score  is offering this service free of charge. Plus, their free report comes with an analysis of your credit worthiness based on a number of factors, such as payment timeliness, number of accounts opened, etc. The report also comes with recommendations on how you can improve your credit score. Best of all, this resource is free.

Even if you have a very good credit, you will have to present a viable business plan when seeking out a business loan, whether from the bank or SBA. The business plan must show the feasibility of your proposed business to convince the "institution" to risk their money with you or your organization. For a guide in preparing business plans, you can visit our Starting a Business section at http://www.powerhomebiz.com/Index/feature.htm 

However, there is such thing as a business loan with a collateral. This kind of loan is easier to acquire because the loan is secured. If you have some properties titled under your name, you may try and inquire from any bank nearest you.

If you have equity in your home, you can also use a "Second Mortgage" financing and use the money for your new business. Normally, second mortgages are intended for home remodeling, etc for your home, but they usually don't bother checking whether you really used the money for home-improvement. Their main concern is that you pay the money back.

This may not be a good option, however because second mortgage financing normally are high interest loans and the pay back amount is almost over 200% than the original loan. Imagine paying back $75,000 for a $25,000 loan in the span of thirty years.

Another option is to check out your family, relatives, friends to become incorporators or partners in your planned enterprise. Present your idea to them and show them how you foresee the business to operate. Show them your business plan. Perhaps, some of them will be willing to put up some kind of investment money for you. And if you have considered the initial amount you will need, ask them to invest specific pro-rated amounts.

Of course, you have to make sure that your business will really work out successfully. Otherwise, you might run into lawsuits and ultimately lose your friends and maybe your relatives.

We have articles in the website that may also give you some insights. http://www.powerhomebiz.com/vol21/bankloan.htm  http://www.powerhomebiz.com/Index/financing.htm 

There are books that you can also check that provides information on getting grants and free government money for businesses. One book you may want to read is "Free Money from the Federal Government for Small Businesses and Entrepreneurs."

Visit your public library and borrow this book, as well as several other books in the same topic. or buy the book from Amazon.com at  http://www.amazon.com/exec/obidos/ASIN/0471130095/powerhomebizguid 

Another resource you may want to check out is the Catalog of Federal Domestic Assistance (CFDA), which lists all grants that the government gives. You may find a grant that you may qualify.

Good luck!

About the PowerHomeBiz.com Guide: 

Nach Maravilla is the Publisher of Power Homebiz Guides. He has over thirty years experience in sales and marketing of various products, which covered as he jokingly describes, "from toothpicks to airplanes"  He also had extensive experience in International trading and he always excelled in special promotional ideas for  retail outlets. 

The opinions expressed in this column are those of the author, not of PowerHomeBiz.com. Users should not treat the Guide's response as legal, accounting, or professional advice as all answers are intended to be general in nature. Such advice can only be properly given by qualified professionals who are fully aware of a user's specific geographical areas or circumstances, such as an attorney or accountant.