Tips for Getting a Bad Credit Business Loan
As you likely already know, keeping an above average credit score is extremely important for any small business owner. 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.
Fortunately, it’s not impossible to secure that loan regardless if you have bad credit, and the tips below can help make that happen:
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 surely help to prove to them that you can manage repaying a loan.Be prepared to reveal your monthly sales and hopefully any 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.
Improve Your Credit Score
Start by reviewing your business credit report to find and fix any errors.Remember that improving your score can’t be done overnight. You need to shape healthy financial habits and prove this credit bureaus 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
Just like a loan, a merchant cash advance is a type of business financing, but it is a totally 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.Thus, even with a poor credit score, consistent credit card sales can still qualify you for this product.
Be Responsible with Bills Payment
Paying bills late contributes to getting a low credit score, so make sure this becomes a priority from now on.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.
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.
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.