Among many factors, one primary factor is your credit score which every bank check when you apply for a business loan. As a business owner, if your credit score is fewer than 600, your odds of getting a loan will considerably decrease. However, it doesn’t mean you can’t get a business loan. You’ll find many business loan lenders that will get you fast business loans despite your bad credit score. Also, by following few steps you can secure loan for your business.
Talk To Your Bank
Speak together with your bank loan officer. They can tell how bad your credit is and just what has caused your credit to get bad with ideas on how to revive it. The bank can also check your specific situation and get you some recommendation on how to get a business loan.
Perk Up Your Credit Score
To increase your chances of getting a business loan, the best thing you can do is to improve your credit score. Unluckily, it takes years to score up, therefore waiting to get a loan while your score improves might not be a best possibility. By following certain tips, you can also boost your credit ratings:
• Check your credit report for errors
• Setup payment reminders
• Reduce the debt amount owed
• Timely payment of all your bills
• Get current and stay current, once you missed payments,
• Contact your creditors or see a legitimate credit counselor if you feels trouble making ends meet.
• Keep balances low on credit cards
• Pay off your debt instead moving it around.
• Do not lock unused credit cards being a short-term tactic to elevate your credit score
• Do not open many new accounts instantly if you’ve been managing credit for a short time,
• Re-establish your credit history if you had problems
Find A Co-Signer
Finding someone with good credit can co-sign for you so your business can get a business loan. The lender will lend money in your name and you’re directly liable for the repayment. The co-signer is only liable when you stop making payments or get short in your payments.
Providing a valuable amount of collateral in form of assets can also get you a small business loan. If you’ve valuable assets in hand, a bank might approve you loan application up to the price of the assets provided. Make a list of your business and/or personal assets and their values for the bank and discuss with them regarding use of assets as collateral for your loan.
One most important thing to consider is when you start searching for lenders, watch out for those who promise you business loans with bad credit. There are several financial lenders claiming to approve you in minutes for a loan despite your bad credit score. Most of such lenders are scams and have terribly high interest rates and/or many hidden fees. It’s wiser to read all the fine print and before applying for loans.