Where can you find a loan for bad credit businesses? So many startups — and even well-established companies in industries experiencing change – struggle with business loans for bad credit and financing solutions when they need funds for operating expenses or growth. Yet business owners have more business loan options than they may think when they need a bad credit loan. Whether you have a low credit score due to missed or late payments or a bankruptcy in your past, you can find a number of business loans for bad credit choices that could be appropriate for your situation.
Bad Credit Business Loans
If your credit scores fall far below average, you do have options. For some business loans bad credit is not an obstacle when you’re seeking working capital. There can be some downsides to some of these options, but when you need a loan with bad credit, you do have some choices. Here are a few options to consider when you’re working on how to get a business loan with bad credit.
When you’re considering certain short term loans bad credit may not be an issue. With long-term loans, a bank or similar institution typically is looking for creditworthy prospects with strong credit scores who can be relied on to repay the loan in full. However, a short-term loan scheduled for repayment anywhere from three to 18 months can be accessible when you need a business loan with bad credit. Some banks consider applicants with credit scores under 500 for short-term loans. Bear in mind that a short-term loan from a traditional lender will have a much higher interest rate than a long-term loan and the borrower may be expected to make weekly or even daily payments on the loan. The good news is that a business loan bad credit can typically be arranged quickly.
Small Business (SBA) Loans
It is possible to get a small business loan with bad credit. With small business loans bad credit does not always bring instant disqualification. You don’t need a perfect credit score to be eligible for a small business loan bad credit, which is important because the Small Business Administration (SBA) loans come with more desirable interest rates. Most successful applicants have credit scores over 650. Traditional lenders take part in the SBA loan program because the U.S. government stands behind the borrower to guarantee the small business loan with bad credit. SBA representatives want to work with small companies that have been in business for at least one or two years. Before approving bad credit small business loans, the SBA specialist will study the borrower’s financial statements to ascertain the chances that a loan will be paid off. If your credit score is lower or your business is not showing signs of growth and consistently struggling, than you may not be eligible for small business loans for bad credit.
If you need to borrow money to buy necessary equipment for your company, you may qualify for bad credit equipment loans. With these types of business loans with bad credit, the value of the equipment is the collateral that guarantees the lender will own something in exchange for the loan. For instance, if you own a trucking business and can increase your profitability with another truck, a financial institution can loan you the money for that truck with little risk. Even with bad credit secured loans, backed by the equipment as collateral, borrowers can have a chance to grow their business regardless of their financial history. The good news is that after you pay off the installments in a collateral loan with bad credit arrangement, you own your own equipment.
Personal fundraising platforms — or “crowdfunding” — represent a newer option for a business loan for bad credit. Sites like “GoFundMe” or “Kickstarter” can make fundraising both small and large amounts faster and easier. This option is not a bad credit business loan, but rather a platform that does not require payback for donations. If you have a large network of friends and family members and if your fundraising page presents a strong and compelling case, you could raise funds for your startup. If you have not had luck closing business loans for poor credit, your credit score is irrelevant to these online appeals.
Unlike bad credit bank loans or other options that must be repaid, invoice factoring is not a loan. When you factor your invoices, you receive an advance on work that you have completed so you do not have to wait weeks and months for your customers to pay you. Many business owners prefer invoice factoring to alternative business loans. When business people with bad credit need a loan, they can qualify for invoice factoring based on their customers’ credit histories, not their own. Compared to some other bad credit options, factoring is a fast solution. Companies can turn their stack of accounts receivable into instant cash after a quick approval process, often within just one day. In addition to speeding up cash flow, as a source of business funding with bad credit, invoice factoring typically provides clients with valuable included services such as professional collections work, credit checks, and access to helpful online account management tools.
To learn more about invoice factoring as a debt-free source of funds, speak with a representative at Interstate Capital, a leader in business funding with bad credit options since 1993. Your financial future is worth a conversation with Interstate Capital’s bad credit business finance specialists.
It all starts with a no-obligation rate quote!