Bad credit happens to good people. Unexpected medical bills, loss of a job, etc. can cause your credit score to drop. Sometimes it’s more important to feed the family than pay your credit cards on time. Unemployment or other issues can spur someone to be their own boss, and there are places to go for funding if you know where to look. While you may not qualify for unsecured business loans, there are many other options available.
Get Your Credit Reports
You need to know exactly what your credit looks like before you start looking for loans. Your credit score could mean the difference between futilely seeking standard loans and the realization that you need something different. If your credit isn’t too bad, then knowing and understanding your history could cause you to consider waiting a few months to apply for a loan while you build a good credit score.
Incorporate Your Business
If your credit isn’t great, but you are very serious about starting your own business, then formally incorporate the business as a way of showing your commitment and determination. Trying to get a loan for Business Solutions Inc., for example, will be much easier than trying to get one for John Smith. Banks will see that you have taken the initiative to go through all the red tape of incorporation and are more likely to provide funding as a result.
Alternative Lending Solutions
You have to be careful when finding a bad credit business loan. Some, more unscrupulous, lenders will take advantage of your situation and try to saddle you with high interest rates, unreachable balloon payments, and more. Luckily, there are a few credible options available.
- Business Credit Cards – There are a number of credit cards out there that can help you not only get capital to fund your business but also help your credit. The worse your credit is, the higher the interest you’ll have to pay or the lower the limit you’ll have. You may need a secured credit if your credit is really bad.
- Merchant Cash Advance – This is a short-term loan that a company can get in exchange for a piece of your future credit card sales. The interest rates are a little higher than regular lending institutions, but it’s a viable option.
- Microloans – The Small Business Administration (SBA) offers small microloans to help finance your business. As far as finance solutions go, you can’t get much better than the SBA, and the credit requirements for their microloans are less stringent than their other loan options.
Don’t let bad credit stop you. Call us today at (713) 893-5759 or fill out our online form to start the funding process.