Bad Credit Business Loans—A Myth
Yes, it’s true, the fabled bad credit business loan does not exist—at least, in and of itself. What you may consider fitting the bill of a bad credit business loan is in actuality one of several lending options. Some are specifically geared for those with bad credits, others just have low credit requirements. This is due to the fact that bad credit makes you a risky borrower in the eyes of many lenders.
Some of these include higher interest rates for people with bad credit, but even then, many institutions will simply pass over those with poor credit history. Even those people and businesses that have made poor credit mistakes but are trying to recover will still fall victim to this issue. Let’s take a moment to see what businesses can do in this situation.
What Serves As A “Bad Credit Business Loan”
Traditional Bank Loan
This may sound like a strange place to start. After all, aren’t banks the most stringent when it comes to credit needs for their loans? Yes, but there are some options out there for those with lower credit ratings. However, these often require either more measures to secure them, higher interest rates, or both. In addition, if your business or personal credit is extremely low, chances are you will be out of luck no matter what. Don’t think of these an example of a bad credit business loan—more of a mediocre credit business loan.
Microloan
A microloan is like a traditional loan but from a smaller lender, such as a credit union. Microloans are often easy to get compared to a bank loan. These are generally for less money, though. They also still carrying high-interest rates due to your bad credit. Depending on why you are borrowing, these may be enough, but for larger amounts, you will need to look elsewhere.
Business Credit Card
The nice thing about business credit cards for bad credit is that timely repayments can serve as a great way to help rebuild your credit. The issue though is that businesses with bad credit generally have a hard time getting them in the first place due to criteria being similar to that of a bank loan.
Home Equity Line of Credit
With a home equity line, banks use your home as collateral for a loan. This only applies to homeowners and may exclude some business owners. Note that collateral doesn’t guarantee you a good APR, not to mention the fact that you will incur a tremendous loss if the business fails, no matter what the reason is. This may be a financial desperation move for those looking for a bad credit business loan, but should only be considered with extreme caution.
Personal Loans
This is another risky financial strategy. It’s wise to draw up legal documents when borrowing money from friends and family. These will help make expectations, repayments, and obligations clear. Depending on the financial situation of your would-be investors, there may not be enough money on hand to cover all your expenses.
Merchant Cash Advances For Bad Credit
eBusiness Funding helps businesses that may struggle with traditional lenders. To do this, we provide merchant cash advances. These are accessible to a wider spread of businesses than bank loans or private lenders. 95% of businesses that meet our simple requirements qualify for funding. All you need is to be in business for at least six months, with over $10,000 in monthly revenue. With us, it’s not about past credit history or collateral, but about your business’s potential.
It’s important to us that you use the funds we offer in the most helpful way possible. As a result, so we place no limit on how you spend our advances. Payroll, expansion, repairs, spend on what you need! We also get you your funds fast, sometimes as soon as 72 hours after you first apply. Repayment is also very simple. Rather than large monthly payments, we take a set part of your future sales. This is set up by our skilled consultants. This percentage stays the same, so if business slows down, you pay less.
Interested? All it takes to begin is filling out a simple contact form. We’ll be waiting, and are looking forward to helping your business get the funding support it needs.
