There are options for loans for small business owners, even with a bad credit history!
Your credit score is like a report card to the business world, but a bad report card doesn’t mean that you’ve failed the grade. There are still ways for you to improve and move to the next semester successfully, by obtaining loans with bad credit. Lenders may not be knocking down your door offering you business loans with bad credit, but there are still options. Here are 5 tips to help you along your path.
Research credit report requirements
You’ll want to find out the requirements directly from the lenders like Financing Your Way, who provide loans for small business owners with bad credit. With some lenders, this may take some time, but with Financing Your Way, you can get the facts fast before you start the application process. Since Financing Your Way works with multiple lenders, they can provide business loan options that are lenient for applicants whose scores are at 600 or below.
Find a lender who cares about more than a credit score
Try to contact a lender shows concern for your situation. Your business is more than just an application, and you need a lender that understands your unique situation. The partners at Financing Your Way are very familiar the handing loans for applicants with bad credit. They work with lenders at smaller, local, and neighborhood intuitions rather than large corporations so they can work with you to find the right loan for your needs.
Consider your merchant account and accounts payable
As a merchant, you receive payments from your clients. These future revenues or credit card sales generated by your business can serve as collateral. This is perfect for businesses without many assets. When applying for loans with bad credit, you can send your merchant account statement in with the application to assist with the decision. The process is secure and the approval turnaround time is fairly quick.
Explore partnership or alternative funding
If you can’t qualify for funding alone, consider partnering with someone who is passionate about your business and would be willing partner. If your business partner has good credit, you can add them onto a loan application to improve your chances of approval. Partnership can be tricky, so be sure a potential partner shares your vision for the business.
Rebuild your business and personal credit for the future
This is the not the simplest way, as it certainly requires more time and planning along the way. If you’re serious about your business and the desire to obtain a business loan in the future, prioritize paying your bills early or on time. Open a business account. Hire an accountant and keep your records clean. Lastly, keep your information current with all three credit reporting bureaus. This is very important for proving to lenders that you are capable of being consistent.