SunWise Capital 2018: How to Get a Business Loan for Poor Credit
Small businesses are also relying on loans to survive the everyday challenges that come along the way, but small business owners loan applications are declined or denied by lenders if they have a poor credit. Having a poor credit or bad credit means not being able to manage the finances properly that’s why banks and financial institutions tend to deny the loan application of people or businesses with a bad credit score. Even if you have a poor or bad credit, it is still possible to secure a small business loan. You’ll find trusted and reputable alternative lending companies or lenders offering excellent loan solutions for poor credit. Instead of relying on the bad credit score, these lenders give due importance on the strength of the business and the operating history.
Lenders perceive businesses with a poor credit as high risk, so it is important to show the lending company that you have detailed financial projections in a specific, measurable, attainable, realistic, and time-bounded manner, as well as a solid business plan. The different options available for your small business may include a microloan, business credit card, merchant cash advance, home equity line of credit, revenue-based loans, or borrowing from family and friends. A microloan refers to a type of loan being offered by credit unions, which is easier to get. The credit requirements for microloans are lower. For small businesses with problems on their cash flow, and needing a financial assistance of $10,000 or less, a merchant cash advance or business card cash advance is applicable. Always make sure to pay your cash advance on time because this is a type of loan that has high-interest rates, and you may end paying more over time than what you initially borrowed.
You may want to take advantage getting a credit card using your business name, make purchases, pay on-time, and establish a good credit at the same time. Remember that credit unions and banks may have different eligibility requirements, and there are also varying interest rates, credit limits, and terms of payment. You can also secure a small business loan by using your property as a collateral for a home-equity loan. You have the option to get a revenue-based loan if you have a business credit of over 550, making more than $100,000 sales a year, and your loan amount should not exceed 10% of your total revenue. It is best to get a loan from lending agencies or companies than borrow from your friends or family because you don’t want your personal relationship compromised because of money matters.
Do you want to get a small business loan? Come and check our website or homepage now to find out more about small business loans.