3 Financing Methods For Unbankable Businesses

Posted on: 13 May 2020

As the economy slows down, some e-commerce sellers may find themselves in a temporary financial pinch. You may not be able to or want to take on more credit. If you are a new business, you may not yet be bankable. Either way, a recession is not a good time to take on more debt.

No need to abandon your business. The following are ways to acquire business capital with no or a low credit rating. 

Layaway Payments for Sellers 

A payment plan allows you to make small, regular payments on merchandise. Once you have paid for the merchandise in full, you can take possession of it. A payment plan will not affect your credit because you do not receive the merchandise until after you have paid for it in full. The payment plan is arranged over a period of weeks or months.

Using a layaway plan for sellers will not require a credit score, but nor will you build a credit score. It does avoid a lender doing a credit check, which can negatively affect your credit score Owing to the economic downturn, many suppliers are selling off products very cheaply. You can secure the products at a very low cost and well them in the post-recession retail market. Reach out to a company that offers layaway payments for sellers to learn more about this option.


Crowdfunding is a way of raising business capital without taking on any debt. Many donors donate a small amount of money. Therefore, no one takes on any lending risk and no interest rate is paid. You may be obligated to deliver a product or service to investors, but it is typically a small token of appreciation relative to the donated amount received. And because crowdfunding is considered a personal gift, no taxes are owed. Crowdfunding is also a powerful marketing tool that can benefit from viral network effects.

P2P Loans

To get a peer-to peer-loan, you will need a credit history and rating. However, a P2P lender will except a much lower credit score than a bank. The cut off credit rating is typically around 600. This compares to a credit score requirement of at least 680 with a bank. These lenders, however, may use dozens of screens behind the scenes to decide whether or not to give you credit. 

This does not mean you have to fill out pages and pages of information. On the contrary, online applications are typically very short. One way P2P lenders protect themselves is by using big data to discern credit trends. The lender may also require that you take out an insurance policy for the full amount of the loan. This adds to your borrowing costs.