Whatever the cause of poor credit, there are small business loans you can qualify for. Maybe you’ve been asking, “How to get a business loan with bad credit?” Because small business loans are specifically designed for businesses with bad credit, it’s much easier to get approved. These options still provide low-interest rates and generous repayment terms. They approach loans from a different angle.
The first step is to evaluate your cash flow, business assets, and available capital. You want a loan that allows you to purchase what you need without putting too much pressure on your business finances. Our team can help you analyze your needs to make a smart choice.
2. Use Business Assets as Collateral
Small businesses that have been operating for many years often have valuable assets available. Construction companies may own loaders, dump trucks, or backhoes. Retail locations may have property. Instead of sitting on paid-for assets, use them to obtain the loan you need for a healthy business.
When it comes to asking yourself, “How to get a business loan with bad credit,” collateral can help you qualify for bad credit business loans regardless of your credit score. This factor is especially useful if you need to purchase real estate or remodel your business location.
3. Choose Bad Credit Truck Loans or Equipment Loans
If the reason you need a loan is to buy business equipment, vehicles, tools, or heavy machinery, you don’t have to worry about your credit history at all. Bad credit truck loans are amazing because they use the vehicle you want to buy as collateral. You don’t need other business assets.
Many different bad credit business loans work this way. Small businesses can get high-tech plumbing equipment or truck-mounted cleaning systems with this program. Transportation companies, for example, can add semi-trucks and delivery trucks to their fleets.
4. Put On Your Game Face
Your company is more than just a credit score; it represents valuable experience, ideas, and opportunities for profits. Perhaps you have a reputation for amazing customer service, high-quality work, or decades in business. These are all things you can mention in your application. In other words, don’t be afraid to show lenders why you’re a great investment.
Never approach the question, “How to get a business loan with bad credit?” with a defeated attitude. Show confidence, passion for your business, and determination to succeed. Believe it or not, these qualities can make a huge difference.
5. Take Advantage of Invoice Factoring
Factoring bypasses the traditional credit score requirements of financing and is closer to a cash advance than a loan. Your business can use unpaid invoices to obtain an immediate infusion of capital. This process provides a large percentage of the invoice value upfront and the rest after clients submit payment. This type of financing only costs you a small percentage of the total amount of bills.
What are the advantages of factoring?
You don’t have to make any payments
The money is deposited in your bank account quickly
You’re not waiting for clients to pay in 30 or 60 days
The process is easy to use
You decide how many invoices to factor
Your business can get significant capital this way
Need money to buy inventory at better pricing tiers? Invoice factoring is often a better option than applying for microloans. This financing solution works for equipment purchases, repairs, business emergencies, payroll, taxes, marketing, and many other needs.
6. Use Your Personal Credit Score
What if your business doesn’t even have a credit score yet because it just opened? For traditional banks, this is the same as having bad credit. The good news is that you can overcome this obstacle. You just have to find the right lender.
One solution is to use your personal credit score. If you have good personal credit — or your partner does — you can often qualify for a loan even if you have a new business. These financing options can help you buy equipment, point-of-sale systems, vehicles, and other things you need. There are also bad credit truck loans and leases specifically designed for startups.
First Capital Business Finance is committed to helping you meet your cash flow needs to grow your business. We serve small and middle market businesses and large corporations with range of loan and financing options