Getting a loan with bad credit might be harder, but not impossible!
The 2017 average FICO score in America is 695, and if you’re reading this, chances are you have found yourself tipped on the unfavorable side of the credit scale. Here are 5 facts you should know about getting a loan with bad credit:
You can qualify
Even with bad credit you can qualify for a loan. While there are fewer option available when compared to the programs for borrower with good credit, lenders are considering more borrowers with bad credit each day. Loan programs that consider more than credit score are becoming more common in the industry so don’t let your low credit score discourage you from applying for loans.
You will need a partner with options
If you want to make the process speedy and painless you will need to partner with a financing company with options. Financing Your Way is a great option, as they have relationships with multiple lenders and they can advise on options before you apply able based on your application criteria.
Your business income and expenses matter
Bad credit isn’t a deciding factor especially if your business has done a great job at managing its finances. Lenders will want to see your company’s bank statements so be sure to not intermingle personal transactions with your business transactions. Lenders want to invest in a company that has a sure future so speak with your CPA or business consultant about how to increase income and decrease expenses before applying for a loan.
You will have higher rates
If your credit score is low, you may receive higher interest rates. These higher rates compensate lenders for taking on more risk. Don’t be discourage by high rates, as these fees charged for lending are minor in exchange for the benefits you will experience after receiving capital.
Loans will help your credit
As you make timely loan payments, you will build business and personal credit. This will help you to qualify for other financing offers and ultimately allow your business to see decreased interest rates and more flexible loan terms. This benefit is worth every penny.