How to Get a Business Loan Even If You Have Bad Credit
As you must already know, maintaining a north of average credit score is greatly important for those who run 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.Having a low credit score could make this 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 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 definitely help in convincing them that you are capable of repaying a loan.Be prepared to reveal your monthly sales and hopefully any improvements in your business’s finances.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
Start by reviewing your business credit report to find and fix any errors.Take note that improving your score will not be achieved in an instant. 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.A cash advance gives you lump sum financing, and you pay the provider by giving them a 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
Late bills payment can pull down your credit score, so avoid this completely moving forward.Below are tips to help you pay your bills 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.
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.