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.Having a low credit score could make this a challenge.
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:
Create a Solid Business Plan
When getting a small business loan with poor credit, it will be smart to build an airtight business plan that can be reviewed by 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 with a less than stellar credit score, a lender may be more likely to work with you if you can show an upward movement on your financial growth trajectory.
Work on Your Credit Score
Begin by scanning your business credit report to spot and iron out irregularities, if any.Keep in mind that improving your score will not happen at once. You should cultivate responsible financial habits and establish this before the credit bureaus 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.Thus, even with a poor credit score, consistent credit card sales can still qualify you for this product.
Be Responsible with Bills
Late bills payment can pull down your credit score, so avoid this completely moving forward.The following are helpful tips for ensuring on-time bills payment:
Be guided by a monthly calendar: If you’re always at a loss when it comes to your bill deadlines, use a calendar that will send you alerts every time a due date approaches.
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.
Make use of apps: There are lots of financial apps that help business owners handle their bills. They are mostly free but you can get more advanced features for a fee.