When Banks says “NO”,
Merchant Advisors says “YES”.
Gone are the days when Bad Credit Business scorers were looked down upon! Credit goes to the emerging Small Business industry, this revolution has incurred a significant spark in the active supply of the loans for Small Business owners. So, now if you are facing any financial trouble, don’t waste your time knocking at the doors of traditional lenders –Banks & Credit Unions.
Their reason for rejection is legitimate; would you be comfortable lending your money to someone who has shown himself a delinquent in the past? The sensible answer would be “NO”. Bank and Traditional lenders look for business owners with a clean record, they don’t want to jeopardize their resources.
POINTS TO Be Considered
- Hub of Small Business Loans
- Why is there so much fuss about Credit and Credit Score?
- How to get a Business Loan with Bad Credit?
- Amplify your chances of Loan Approval
- Is Credit Score the only prerequisite or do lenders look for more?
- How can you use Bad Credit Business Loan to improve your Small Business?
- What makes us different from other lenders?
- The Last Drop of Wisdom
Everything about Bad Credit Business Loans
Looking at the lending pattern, retrospectively, if your credit score is below 629 then you are an owner of a bad credit score. And the turmoil that follows is a no secret. The said statement sheds a ray on the importance of Credit Score, but it does not mean at all that you have closed all the doors of possibilities on yourself. The whole scenario is a bit baffling, you need business financing to get yourself out of the bad credit spiral and if you have poor credit you won’t be qualified for a traditional loan. Don’t let this dilemma bring you down.
Alternative lenders are available at every corner on the street to act as a Band-Aid on your financial scratch. Merchants Advisors acknowledges the frustration caused by the rejection and that is why they offer an amalgam of Business Loans suitable for every nature of small business.
Hub of Small Business Loans
Hunting a small business loan for your crumbling business in this fragile economy? You are in the right place; we offer custom-fashioned business loans for every type of small business. Our loans will help you find a way out of financial crisis. Looking for working capital? We have got it. You can apply for equipment financing and get upgraded equipment for your business. We provide fast funding on flexible terms and early payments.
Here are six of our best financing options for bad credit business owners:
1 Short-Term Loans
These loans can provide you with a handsome lump of money once you have agreed to pay it back on time. Be mindful that these are the easiest loan to apply and they have higher interest rates and APR values.
You can have access to the Short-Term Loans in two days at maximum and fast cash comes at a price. Usually, these loans last for 3-18 months and their easy application can act as a fix that you need instantly.
If your credit score is above 500 then this is the best option for you and its early loan payments are a plus. Most of the alternative lenders, such as Quarter spot are even willing to let go of the remaining interest only if you have made all of the payments before the due date.
2 Business Line of Credit
A business line of credit is the quick financial solution for all of your financial troubles, although they come on higher rates than the rest of the options. It provides continuous access to funds if this is what business needs. Just like a traditional credit card, the interest will only be charged on the open balance. One of its endless perks is it asks for monthly payments instead for weekly or daily payment. SO if you think this is the best solution for your business then apply for one right away and rescue your disintegrating business.
3 Invoice Financing
Invoice Financing is the best option to secure a business loan. It opens up a window of collateral offerings. Once you have offered your unpaid customers invoices as collateral to the lenders you have improved your chances of approval.
Usually, the lenders offer you 85% of the total of the invoice receipts, and the rest will be covered in the fee. This is a remarkable way to get the necessary funds to grow your small business. Most alternative lenders are willing to disregard the bad credit, so take advantage of this situation as much as you can.
4 Equipment Financing
If your small business needs an upgrade of technical equipment to carry out monotonous operations then this is the safest and reliable option for you. If you have ever leased a vehicle from the bank then this will be easier for you to comprehend. Here, you have given the total money that you need to make the purchase and later you pay off the loan payment terms.
If your business credit score is below 600, we have good news for you. You can still qualify for the loan. And if Equipment Financing is what your business needs than nothing should stop you from applying.
5 Merchant Cash Advances
We can’t stress enough on how the Merchant Cash Advance (MCA) is the best small business financing solution for bad credit scorers. MCA works like a credit card and it’s the best fit for business owners for when the sales are high the lenders will take considerable money out of your sales and when the sales are low, the lenders will take the money accordingly.
As compared to the other bad credit business options, MCA is the most expensive one. So take a chance on it only and only when it is required and necessary.
6 Working Capital Loan
Looking for funds to cover your routine expenses like payroll, inventory, taxes, and others? Merchant Advisors provide Working Capital Loans to meet your every financial requirement. You can get loans ranging from $5,000 to $500,000, with comprehensive paperwork and easy approval. If this is the best suitable loan for your business, apply right away!
Exceptional (800 - 850)
If your credit score sits in between this range, in the time of any financial crisis, banks and traditional lenders will happily assist you.
Very good (740 - 799)
Even though it is not the best of the best score, but your chances for a remarkable business loan approval still exist.
Good (670 - 739)
Having a credit score above than 670 gives you a handsome chance of loan approval from the Small Business Administrative loan.
Fair (580 - 669)
Here you will qualify for a couple of small business loans, they are willing to look past the low credit score.
Poor (300 - 579)
Let’s face some hard facts, if your credit score is lying below 500, you will be facing a hard time getting approved for a loan. But if your business has been running for a long time period and it’s profitable then you are out of the
But how to get a Business Loan with Bad Credit?
Merchant Advisors provide access to the much-needed working capital to carry out day-to-day operations. Secure yourself a bad credit business loan by following these three steps:
1. Acknowledge your Personal Credit Score
As mentioned above, personal and business credit score are two major factors that the lender relies upon. Now that we know the importance of these scores, the next step on your part will be to calculate your personal and business credit score.
2. Understand the eligibility requirements to qualify for the loan
Every financing option demands a specific set of requirements, and if you want to secure the loan you will have to meet the required terms. Usually, those terms revolve around your Personal Credit Score, how long have you been running this business? And lastly, your annual revenue.
One can’t be a true judge of it, so it’s recommended to ask for a professional’s help. Merchant Advisors provide expert’s help to all of its applicants. If you want their opinion, apply for a loan.
3. Pick the best option for your business
Your previous research might be giving you a rough idea about the availability of a wide range of bad credit business loan. You shouldn’t apply for the first one that you see, exhaust all of your options and then make a final decision. Apart from considering eligibility requirement and repayment factors make sure your lender doesn’t have a notorious reputation. Customer’s reviews might be of help here. We, Merchant Advisors, have a 90% customer satisfaction rate.
Don’t assume that credit score is the only factor responsible for your growth there are multiple other domains that can help you get what you are looking for.
Amplify your chances of Loan Approval
It is common knowledge –loan approval is an uphill battle. You can’t go unprepared especially if you have a weak defense meaning poor credit score. In order to pose a strong position, it is recommended to provide collateral and have a co-signer.
No alternative lender is naïve enough to risk his/her reputation and credibility by offering the loan to a defaulter. Applying for a business loan with bad credit is already asking for more, so it is better if you are willing to offer collateral and there are two ways you can do that:
Want upgraded equipment for your restaurant or construction business but don’t have an impeccable credit score? Apply for equipment financing, here the equipment you financed will act as collateral. And in case of any crisis, the lender will cease the financed equipment and your personal credit will be saved from any blow. If Equipment Financing isn’t the right fit for your business, there is another option available.
Here, your unpaid invoices from customers can act as collateral. The lender will take some funds out of the invoices till the repayment is completed.
All in all you will be getting the loan to get yourself out of any financial trouble.
Help from a Co-Signer
Basically, a Co-Signer is someone who agrees to take care of your loan payments if due to any rational reason you are unable to do so in time. So, if you have any relative that has a steady business growth and a decent credit score ask them to help you out in the hour of need.
Is Credit Score the only prerequisite or do lenders look for more?
Although having a good credit score is important to qualify for the business loan but this isn't only factor that counts. If you are lacking in the credit score department then there are various other options that can help you out. Merchant Advisors value your hard work and credibility so there are multiple other factors that are taken into account:
Annual Revenue holds a remarkable significance in your loan application, the more revenue you are bringing in the better are your chances of approval. There is no hidden truth here, the more revenue that’s your company is generating the most trustworthy stance you are presenting in the front of your lender. It holds more importance when you are applying with a bad credit score. If your annual revenue is high, the lender has a trust on you that you will be repaying within the given time.
Now that we have annual revenue covered some alternative lenders will also want to know if you are making enough profit. If you have legitimate documents to show your three months business growth to the lender that would be great but if your business is not administrating noticeable growth that is okay as well. You will be qualified for the growth nonetheless.
Credit Debt Obligation
As an alternative lender ourselves, we would like to know if you have to pay off any previous debt, most alternative lenders don’t like to be in that position. It merely depends on your financial standings, nature, and framework of the particular loan that you have applied for. There are other alternative lenders that don’t mind the said situation at all, they are even willing to approve your business loan so that you can pay off your previous debt, easily.
Put yourself in the shoes of the lenders, will you lend a loan to a firm that has non-existent cash flow? The rational and sensible answer would be ‘NO’.
If you have a history of managing cash flow responsibly, then your chances of loan approval are enhanced. Because the lenders would know that you will be paying the debt on time.
Background and history matter a lot; if you have faced any bankruptcy or a foreclosure in the past your chances of loan approval are slim. In this case, make sure you are fulfilling the rest of the mentioned criteria.
Running a business is not a child’s play. If you are managing it aimlessly then you are not going to go that far. When applying for the loan other lenders will asks for a solid and realistically approachable plan, for they need to know what is going to happen with the money.
Same is the case with us, your chances of loan approval are instantly raised when you present us with a 5-year business plan. We would really appreciate if you give us a plan so that we know your business is not a dead end.
How can you use Bad Credit Business Loan to
improve your Small Business?
If you want to eradicate the ‘Bad Credit’ spell from your business, then you need to be more vigilant about how you play with the resources that are the courtesy of bad credit business loans. Here are a couple of steps that you should consider as a precautionary measure to avoid all financial strain in the future.
Pay the debt on time.
Set multiple reminders or hire assistants that can act as reminders, so whatever you need to do to make sure you are making repayments on time.
By paying the lender on time you will be maintaining a professional relationship with the lenders and more importantly, this will give you a solid chance to improve your credit score.
We can’t emphasize the importance of good financial standing and decent bank account enough. Every lender, be it traditional or alternative will look at it.
So, save yourself from the future hassle and get rid of all the skeletons from your financial closet. Clear out any foreclosures, overdrafts, and bankruptcies.
Keep a check on your Credit Score.
Don’t demand a credit score sheet just when you need a business loan. In the regular days keep your credit score under the microscope so that you don’t have to face any surprises.
With the advancements in the digital world and small business industry, there are many online applications or software that can help you keep a check on your credit score.
Running from your financial standing is inevitable, so isn’t it better to keep an eye on it?
Don’t call quits!
Don’t give up on your dreams just yet. The longer you are in the business the better are your chances for loan approval.
The time that you have given to your business is always going to be a huge factor in the loan approval application.