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 vital when you’re looking for additional working capital, and are thinking of applying for a small business loan.With a low credit score, this could be a feat.
The good news is, it’s possible to get that loan even if you have poor credit, and below are pointers to help you do that:
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 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.Keep in mind that improving your score will not happen at once.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.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
Paying your bills late hurts your credit score, so avoid this totally from hereon.Below are tips to help you pay your bills on-time:
Use a monthly calendar with reminder: If you’re always forgetting your deadlines, get a calendar that can be programmed to notify you as your due dates come close.
Revisit your budget: If you’re paying bills late because you’re short on cash, you have to improve your business’s budget going forward, making sure that you will be able to pay for monthly expenses on time.
Use apps: There are several financial apps out there that you can use to help you manage your bills. They’re usually for free, although if you want more advanced features, you will have to pay a fee n most cases, they are free, but advanced features will naturally come with a price.