Is it Possible to Attain Small Business Loans despite Bad Credit?
Creating a business or franchising one requires huge sums of money. Whenever the money needed for a business is insufficient, people often try to get business financing. The difficulty in getting a small business loan is that it checks the client’s personal records for any previous payment problems. This means that all clients who have a good credit history would be accepted while clients who have a bad credit history would be ignored.
Most money lenders are not brave enough to give credit for small businesses because of the possibility that they won’t be paid again. Acquiring business funding however often entails numerous risks to those who have passed their requirements. Small business financing loans are similar to personal credit cards; it requires collateral payments. Is it possible to acquire small business loans with bad credit? And is it possible to acquire loans for small business without collateral?
Small Business Loans With Bad Credit: It’s Possible
The answer to those questions is yes, there is. An example of a small business loan despite bad credit history is the business cash advance. Business cash advance offers numerous benefits. It has no application/late fees, no collateral and no restrictions on business types. It allows unrestricted use of funds. It has a simple application process; it has great rates and affordable terms. It is an easy and a quick method for obtaining credit for small business. Even though business cash advance has lots of advantages, it also has its own standards and qualifications that must be followed.
Small Business Loans With Bad Credit: What’s Required
As a general rule, most of these business loan lenders would require the use of credit cards as a form of a marketing strategy of their product. It also requires the business to be at least 3 months of age and it should have already possessed an average of $5,000 sale per month. Non seasonal business must provide 3 months of their sales records while seasonal business must provide at least 12 months of sales records.
Aside from the business cash advance, premium money product is an example of loan options for small business given to persons with personal credit issues. These types of loans for small businesses offer a higher monetary support that would help their client’s businesses. The difference between business cash advance and premium money product is that the latter gives a higher loan and the latter requires a better qualification. The qualifications for applying for a premium money product is that the business must be operating for a year with an average earning of $15,000 for 12 months. Persons who would be qualified must have no problems with tax and must have a personal credit score of 600. The downside of this type of loan is that it also has a high interest rate.
Small Business Loans With Bad Credit: Final Thoughts
The repayment method for these types of small business lending is simple. Since it is a basic requirement for business’ loans to use credit cards in making business transactions, companies would then deduct a small percentage of the clients earning as a form of payment for the loan. The problem with this method is if they have hidden charges that the client must pay.
What was cited as an example above are just some of the numerous programs that companies offer in order to lend small business loans to customers with bad credit. If a person wants to ask help in the form of business loans, it is important that that person be more inquisitive about other methods of loans as well as be inquisitive about the hidden problems that he/she might face.