Loan Qualification Criteria
How do you know if your business is eligible?
- Minimum Annual Revenue $50,000 - $150,000
- Minimum Personal/ Business Credit Score 500 – 650
- Time in Business: 6 months – 2 years
When Banks Say No, Merchant Advisors Says Yes
Credit scores are important evaluation tool that lenders take into account while making lending decisions. A good credit score can make the securing easier, while a low or poor credit score can results in annoyance. Getting business loans with bad credit are extremely hard, as many businesses have learned. The 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." Banks and traditional lenders look for business owners with a clean record; they don’t want to jeopardize their money.
With the advancement in lending industry, lenders have evolved too. They focus more on what is a fair credit score as a fundamental factor in analyzing potential borrowers’ risk. For a small business owner, having quick access to capital is essential for growth. A bad credit doesn’t stop you from securing the money you need to grow and support your business. Merchant Advisors understands how exasperating this can be, which is why we provide flexible business financing services in form of bad credit business loans for poor credit borrowers.
Bad Credit Business Loans from Merchant Advisors
We provide custom-tailored financing solutions to business owner needs. Regardless of your credit score, Merchant Advisors bad credit business loans feature simple documentation, quick turnarounds, and easy payments.
Contact Merchant Advisors today to explore your
business funding options!
How to Get a Bad Credit Business Loan
Even with funding for business with poor credit, you can secure business funding for bad credit to grow a successful small business. Secure your bad credit business loans by following these three steps:
1. Know Your Personal Credit Score
Lenders use business and personal credit scores to determine your creditworthiness before approving you for money. Both these scores can influence your ability to secure funding, so knowing them before making a loan application can get you a head start in determining the best business funding options.
2. Understand Loan Options Based on Your Eligibility
Different business funding options have different eligibility requirements for approval. The requirements include your personal credit score, the time in business and your business annual revenue. Before making a loan application, it’s better to understand the requirements for all types of business financing services to conclude which bad credit business loan option will give you the best chances for approval.
3. Pick the Best Loan Option
You will find a variety of business loan options with poor credit. While choosing a bad credit business loans, consider the eligibility requirements, repayment terms as well as the lender reputation. Read lenders reviews and speak with their representatives to find out which lender is suitable to your financing needs. We, Merchant Advisors, have a 90% customer satisfaction rate.
Improve Your Chances of Getting Bad Credit Business Loans
Securing a business loan is an uphill battle. You can’t go unprepared especially when you have poor credit. You need to be prepared before applying for business loans. Below are listed few key steps you can take to improve your chances of getting quick approval on your business loan.
Lending money to small businesses is considered risky especially loans for businesses with bad credit. One better way to improve chances of getting approval is by offering small business loans with bad credit & collateral. There are two business funding options:
In case of invoice financing, your invoices serve as collateral for the loan. The financing company advances a certain percentage of each invoice and charges a fee for service.
If you’re seeking funding for equipment purchase or upgrades, consider applying for equipment loan financing. In this scenario, the equipment itself serve as collateral for the loan. If you default on your business loans, the lending company will seize the equipment to recover their losses, but your personal assets will remain protected.
Help from a Co-Signer
A co-signer is someone who agrees to take on partial responsibility for a small business loan by “co-signing” the loan agreement and takes on the responsibility in case you default on the loan. A co-signer is typically an individual with a favorable credit score or steady source of income who can handle making loan payments if the primary borrower becomes unable to.
Best Bad Credit Business Loans
Are you looking to secure guaranteed small business loans for your crumbling business? You are in the right place; we offer custom-tailored business loans for every type of small business. are six of our best business financing services for bad credit business owners:
1 Short-Term Loans
With short-term business loans, you can get a lump sum money to pay back over a fixed amount of time on a set payment schedule. The payment you make each payment will includes the principal amount plus any interest owed.
2 Short-Term Business Line of Credit
When your business needs continuous access to funds, a business line of credit is a perfect fit. With a line of credit, you can access funds on continuous basis up to a specified approved credit line. Similar to a traditional credit card, the interest will only be charged on the credit line you’ve used.
3 Collateralized Loans
A collateralized loan is one where you secure business funding solutions with a collateral. If you’re unable to pay back the loan, the lender can seize collateral to recover the loss. Collateralized loans are secured business loans that are secure with invoices or business equipment financing for bad credit.
4 Merchant Cash Advances
When your business needs quick cash, a merchant cash advance (MCA) offers you a lump-sum amount of money in exchange for a percentage of future credit and debit card sales. As compared to other business funding options, MCA is the most expensive one.
5 Working Capital Loans
If your business needs fast business cash to finance daily business operations like payroll, inventory, taxes etc., a working capital loan can help. Merchant Advisors provides working capital loans up to $500,000, with minimal paperwork and quick approval.
6 Invoice Financing
Invoice Financing is another suitable business funding option to secure a business loan with bad credit. 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 goes out as a fee. This is a remarkable way to get the necessary funds to grow your small business.
Things to Consider When Applying for a Business Loan
Apart from your credit scores, there are some additional factors that lenders require you to submit while evaluating your loan application. At Merchant Advisors, we generally review a business's annual revenue, cash flow trends and credit history. Here are some important things to consider when applying for a business loan:
Borrowers with good credit score generally receives better terms and interest rates on their loans. If your credit score is low, chances are that you’ll be charged with higher annual percentage rate (APR). However, if you can secure guaranteed small business loans with a manageable APR, it can help improve your credit score over time. After you’re approved for a business loan with bad credit, make sure to make timely payment to help increase your credit score while using the funds to grow your small business.
We don’t require you to provide a business plan but some lenders do. When applying for the loan, most lenders will ask for a solid and realistically approachable business plan. They need this to know what you’ll be going to do with the money. Your business plan should include unique value propositions, marketing strategies, leadership team, and explain the amount of funding you need and why it’s required.
Current Debt Obligation
Borrowers should discuss the ongoing repayments with the potential lenders, to avoid any future inconvenience. Most alternative business cash advance lenders don’t like to be in that position. It merely depends on the financial position, nature, and the framework of the particular loan that the borrower has applied for! There are other alternative cash advance lenders that don’t mind ongoing debts; they are willing to approve a business loan. However, taking on more debts can be risky especially one that you can’t realistically and responsibly repay.
Lenders take into account both business and personal credit score to determine your overall creditworthiness. A personal FICO score is exclusively used to determine a borrower eligibility for a business loan. Before making a loan application, try to improve your personal credit score so you can have plenty of options when applying for a business loan.
A business annual revenue is another important factor cash advance lenders consider for eligibility. If you’re approved for a business loan, the qualifying loan amount will usually be around 8% -12% of your business’s annual revenue.
Business cash advance lenders want to have whether your business is profitable or not even if your annual revenue is high. Having a solid profitability can help increase your chances of approval. If you can demonstrate your business growth in the last 3 months or more, it could increase your chances of securing a business loan.
Cash flow management is also an important factor that lenders take into account. After all, they want to make sure you’re capable to handle money and can make timely loan payments. If you can demonstrate healthy cash flow management, then your chances of loan approval will also increase.
Lenders also review credit history to check for bankruptcy, foreclosure or another red flag in the borrower’s report. Having business cash advance bad credit doesn’t mean you can’t qualify for business funding options that your business needs, especially with lenders like Merchant Advisors who offers guaranteed small business loans for bad credit.
Why Merchant Advisors?
At Merchant Advisors, we understand your unique needs and provide guaranteed small business loans to keep your small business progressing.
- Experience in the Industry
Helping small business owners since 1997
- Trusted by Small Businesses
Billions in funding to thousands of businesses nationwide
- Personalized Financing
Customized business financing solutions to small business needs
- Quick Application Process
No cost, no-obligation application with funding in 24 hours
- Your Personal Loan Experts
Experienced business loan experts helping you succeed
- Save Time and Money
Let’s be your helping hand so you can focus on growing your small business