Banks are too conservative and are regularly trying to limit their risk. They’re the last location a small business owner with bad credit gets the funding they require. There have been many lenders in the market that have appeared over the last couple of years that have made the small business lending less complicated for those with bad credit problems. Most of the lenders in the market are paying attention on particular type of business lending. In case you have bad credit and fit the mould, you will be able to get the funding you want.
Don’t let your credit issues stop you from getting the required funding. Listed funding options can get if you are experiencing bad credit issues.
- Merchant Cash Advance (MCA)
It is not a loan, in fact it is an advance primarily based on your future credit card sales. A cash advance lender will provide you a lump amount of cash for a selected percentage of your future credit card sales. Merchant cash advance does not require you to have excellent credit. The cash advance amount can be funded to you within 24 hours. The repayment term is normally between 3 months to one year. Your payments are automatically deducted on a daily basis. The repayment amount deducted by the lender on a daily basis can fluctuate based on your daily credit card sales.
- Merchant Check Advance (EPA)
Now you can get the working capital you require in as little as three business days with the help of Merchant Check Advance (EPA). The Merchant Check Advance is flexible and quicker funding and requires less paperwork than conventional loans.
Merchant Check Advance additionally referred to as an Electronic Payment Advance (EPA) isn’t a loan; it’s a lump sum cash payment against future sales collected through electronic approach. EPA is primarily based on all your business receipts which are or can be transformed to electronic payments.
EPA is an ideal solution for businesses that do not currently accept credit cards yet get most of their sales within the form of consumer or business checks, ACH bank wires and transfers.
The check advance amount a business qualifies for is based on its previous monthly gross sales and also on its average monthly electronic payment amount. Merchant check advance is different from a merchant cash advance. In merchant check advance, the funding amount is usually calculated using a business’ future credit card receipts.
- Accounts Receivable Financing (A/R Financing)
Are you currently experiencing cash flow problems due to having to wait to get paid? In case you run a small business that presents a service and it takes you 30 to 90 days to get paid and also you don’t have good credit to get a conventional loan then A/R financing is for you. This sort of funding is right for bad credit business owners because your credit is inappropriate for getting the funding you require.
- Equipment Financing/Leasing
For business owners with low credit score who need financing and have equipment they can leverage a sale-lease back is an excellent way to get access to working capital. In case you possess your equipment or have a good amount of equity you can apply for this equipment leasing option. The equipment financing lender will buy your equipment from you giving you with a lump sum of cash. They may turn around and lease the equipment back to you without it ever leaving you business’ possession. You’ll pay a monthly payment for a term ranging from 1-5 years. And at the end of the term, you can purchase the equipment back.
The Bottom Line
Previously it was very complicated to get a business loan with bad credit score. However in current small business lending market, there are a number of lenders who are inclined to lend you cash even with bad credit.
Getting funding with low or bad credit score will come at a higher cost. But with the appropriate research and thoroughly weighing your financing options, you can find the best business funding solution for your small business.