How to Get a Business Loan Even If You Have Bad Credit
As you likely already know, keeping an above average credit score is extremely important for any small business owner. This can be particularly vital when you’re looking for additional working capital, and are thinking of applying for a small business loan.If your credit score is low, getting approved could be a challenge.
Fortunately, it’s not impossible to secure that loan regardless if you have bad credit, and the tips below can help make that happen:
Have a Concrete 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 surely help to prove to them that you can manage repaying a loan.Be willing to divulge your monthly sales and improvements in your business’s finances.Even if your credit score isn’t impressive, a lender may be more inclined to take you if they find a positive pattern on your financial development trajectory.
Work on Your Credit Score
Start by reviewing your business credit report to find and fix any errors.Take note that improving your score will not be achieved in an instant.You have to form good financial habits and let the credit bureaus see for themselves over time. If your need for financing isn’t urgent, you should first concentrate on improving your score, and then apply.
Get a Merchant Cash Advance
A merchant cash advance is, like a loan, a type of business financing, but it is an entirely different product.With a cash advance, you get lump sum financing which you repay by giving your provider a certain percentage of your personal credit card sales.In other words, even with bad credit, this product can still be available to you if your credit card sales are consistent.
Be Responsible with Bills
Late bills payment can pull down your credit score, so avoid this completely moving forward.Here are a few ways to help you ensure that your bills are always paid on-time:
Create a monthly calendar reminder: If you always forget to meet bill deadlines, get a calendar with a notification feature so you will be reminded as your due date draws near.
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.
Get help from apps: There are many financial apps that can help you manage their bills. They are mostly free but you can get more advanced features for a fee.