Yes, You Can Get a Business Loan Even with Bad Credit
As you may already know, having an above average credit score is hugely important while operating a small business. This can be particularly crucial when you need additional working capital, and are considering getting a small business loan.If your credit score is low, getting approved could be a challenge.
The good news is, it’s not impossible to get that loan even if you have bad credit, and here are tips to help you do that:
Create a Solid Business Plan
When applying for a small business loan with bad credit, it will be good to have a solid business plan that you can present to your lender.This will certainly help convince them of your ability to pay them back.Do share your monthly sales as well as any improvements in your business’s financial status.Regardless of your credit score, a lender may be happier to approve you if you can show that you are are on a positive growth trajectory.
Work on Your Credit Score
Begin by checking your business credit report to see and correct any discrepancies.Remember that improving your score can’t be done overnight.You have to form good financial habits and let the credit bureaus see for themselves over time. If you’re not in a rush to get financing, it’s wise to focus first on helping your score before applying.
Get a Merchant Cash Advance
Similar to a loan, a merchant cash advance is a type of business financing, but it is an altogether different product.A cash advance is basically lump sum financing that you repay by giving your provider a portion of your personal credit card sales.Therefore, even if your business’s credit score is under average, if you have constant credit card sales, you can still be approved for this option.
Be Responsible with Bills Payment
Late bills payment can pull down your credit score, so avoid this completely moving forward.The following are helpful tips for ensuring on-time bills payment:
Be guided by a monthly calendar: If you’re always at a loss when it comes to your bill deadlines, use a calendar that will send you alerts every time a due date approaches.
Review your budget: If you’re always missing deadlines because of limited cash availability, refine your budget to make sure that all your expenses are paid when they should be.
Make use of apps: There are lots of financial apps that help business owners handle their bills. They are mostly free but you can get more advanced features for a fee.