If you have a bad credit score, trying to get small business loans could be a bit difficult. As such, banks do not cater SBA loans to startup companies. They require a couple years in business or, when do they lend to startups, they generally expect the business owners to have experience in the industry. As a startup or small business, it can be hard to raise capital.
However, having a low score does not stop you from getting your startup running.
Read on to find out how you can get the required finances for your small business.
Look for Alternative Sources
You might have been dreaming of launching your small business for years and now finally have decided to act on it. You can be your own boss and in the process, become a great employer and a competent leader. And then you look at your credit score. Uh oh.
If your FICO score rating is lower than 620, it is bad credit.
Perhaps the first thought you get when you learn about your bad credit score is “How can I start my business now?” Never fret; you can still start your dream business. All you need to do is look for alternative sources.
“When traditional routes of finance don’t work, you must think beyond bank loans.”
Other Options for Bad Credit Loans
Home equity line of credit and business credit card loans are also popular. Nevertheless, these work if you own a house, or if you already have a company with good business credit. Therefore, these may not apply to everyone. However, there are other options like:
Though these are similar to traditional bank loans, you can take the loans from credit unions. As the name suggests, these loans are small, ranging around $50,000. Hence, there is not much stress on a good credit requirement.
Revenue Based Loans
Provided that your credit score is over 550 and revenue is $100,00 per year, you can get these loans. Still, the amount of credit cannot exceed 10% of your revenue.
Friends and Family
You might have friends and relatives who believe in you and want to see you succeed. Irrespective of your credit score, they might help you materialize your business concept. However, these resources you have pooled up might not be enough to rebuild your credit score. This is where private lenders and finance companies can help you.
With secure financing from First Capital Business Finance, you can get small business loans in a smooth and quick process.
How to Get Small Business Loans
Getting a small business loan is easy, even if you have a bad credit. This is because the focus is on your potential, business revenue, and other parameters.
This is good news for both businesses and individuals with bad credit scores. There are lenders from whom you can get the finance quickly.
Types of Small Business Loans with Bad Credit
Business financing feels especially complicated if you need business loans with bad credit, but take a look below. Here are some of the loans you can get:
Business Line of Credit
Business line of credit is also available to you as bad credit business loans. Although this is not a business loan, it can cover unexpected and temporary cash shortage. The interest charged is only on the borrowed amount and you get the funding immediately.
Be it for your new bar, established restaurant, or commercial truck, you can apply for a business loan. This enables you to purchase the equipment and improve overall efficiency. Your profitability increases and ultimately gives an edge over your competitors.
In equipment financing, you get the finances to procure machines and equipment. Likewise, with inventory financing, you can buy raw materials.
Merchant Cash Advance (MCA)
As a business owner with cash flow problems, you can get cash advances. Merchant cash advance, or business cash advance, is an advance on your future revenues. A fixed percentage of your daily sales goes to the lender automatically. Hence, you have the flexibility to repay more or less amount daily, according to your sales. Furthermore, the total borrowing cost doesn’t exceed the initial amount if you take more time to repay it. For this reason, MCA has become the best option for small business loans with bad credit.
“Get business cash advance from First Capital Business Finance, with absolutely no collateral.”
Plan for the Future
Though there are many options for you to get business loans even with bad credit, you must plan for the future. Your credit score is as important as your business growth. You should improve your credit so you can become eligible for better loans. As a business owner, lenders will look into your score to see if you are trustworthy.
Contact First Capital and Get the Best Small Business Loans That Suit Your Needs
If you are seeking working capital or merchant cash advance, this is the right place for you. First Capital Business Finance offers quick and hassle-free loans. Contact us and find out more about what we can offer for your business. To know your eligibility and to get pre-qualified, call us at 888-565-6692 or contact us online!
You Can Get Small Business Loans with Bad Credit | First Capital Business Finance