As a business owner, there is a really good chance, you’ll be looking for funding at some point in the life of your business, for most, this is a natural step for growing. For others, especially those business owners struggling with bad credit, it can be a step you’re dreading to take.
Bad news first, having bad credit means you probably won’t qualify for the gold standard SBA loan or a bank term loan, but here is the good news, just because you have bad credit doesn’t mean you can’t get financing. And thankfully there are more and more alternative lending options that continue to emerge for small business owners in this exact situation.
Does your credit score matter?
Traditional Lenders use your credit score as a metric for measuring risk, alternative lenders do this as well, but it will not be the determining factor of receiving a business loan. The lower your score is, the riskier you and your business appear.
Traditional lenders (banks and credit unions) generally look for a minimum credit score of 650, and with many that may require a higher score, before approving your application. This is not a hard and fast rule, but it at least provides a benchmark excluding all other factors. Luckily, acquiring and paying off a loan or receiving alternative funding, even if it is not the best option available, will play into improving and growing your business.
What Alternative Lenders Are Considering
When alternative lenders review your application for any of the small business financing options, they will consider many factors to determine if you’re “fundable”.
Here are a few things that help alternative lenders look past your credit scores:
An alternative lender’s focus when offering a bad credit business loan is if you will be able to make your payments and make them on time. Showing that you keep enough money on hand to afford regular expenses helps you qualify for small business financing, good or bad credit.
This is the reasoning why alternative lenders will ask to see at least three months of business bank statements and more if you are a seasonal business and what kind of financing you are applying for.
One of the larger parts of your loan application is your business’s annual revenue. High revenue proves to lenders that you can repay their loans, so when a business owner applies for a loan even with bad credit, high revenues help offset the risks tied to it.
Annual revenue also factors into the size of the loan you qualify for. Often, the higher the revenue, the higher the loan amount you can receive.
Even when businesses have high revenues, alternative lenders want to know if your business is profitable.
While your business does not have to be highly profitable to qualify for a loan, it will help your chances, especially if you are looking for business funding with bad credit.
Commonly businesses take out loans when they already have other loans on their books. If you have poor or bad credit, you might have a more difficult time qualifying for a second or third loan position.
Even with poor and bad credit, you can still receive one of the best bad credit business loans available through alternative lending. Generally, banks are more risk-averse while alternative lenders generally focus more on the overall financial health of a business, so your personal credit score, good or bad will not affect the approval criteria. We will explain how to apply for a business loan with bad credit.
Business Line of Credit
A business line of credit provided by Capital for Business is based on the revolving credit. That means you can use the funds over and over again. Having a business line of credit provides you with the extra flexibility and peace of mind when it comes to injecting money into your daily operations. It helps you avoid downtime and make sure things are running smoothly
Small Business Loan
A small business loan from our marketplace of 100+ alternative lenders will enable you to get the capital you need for your business growth. Our high approval rates mean that we say ‘Yes’ when banks say no. Our lending process which takes less than 5 minutes will not affect your fico score and we boast a 24-hour loan approval.
Working Capital Loan
Working Capital loans can help you take care of immediate needs in your business, whether that is a cash-flow shortfall or a new business opportunity. No collateral is required for our working capital loans or short-term funding, the required documentation is limited and perfect credit is not needed. Nearly every industry can get a working capital loan. Working capital loans are perfect for business owners who need short term funding to grow. Working capital loans are simple, fast, and affordable and are designed to help with seasonal shortcomings with revenue, or need to boost inventory.
Merchant Cash Advance
A Merchant Cash Advance is an innovative alternative to a traditional small business loan. Capital for Business utilizes your expected future credit and debit card sales to be able to provide you with working capital so you can put your business plans into action. Instead of fixed daily payments, the repayment for an MCA is completely flexible.
Are you in the need for new business equipment but don’t have the necessary capital on hand to pay for it? Equipment financing done with Capital for Business is truly simple fast and affordable. We are a top of the line marketplace alternative lender that can provide you with same-day funding to purchase any type of equipment that your business may need. Whether software, heavy construction equipment, vehicles, and much more. You will repay your equipment loan with low monthly payments and we keep the upfront cost minimal to something that your business can afford.
At Capital for Business, Invoice factoring is a quick and flexible source of funds for businesses that are waiting for outstanding receivables to pay. We simply utilize your accounts receivable as the collateral and advance funds against the face value of your invoices. Invoice factoring allows your credit line to grow proportionately with your sales cycle. We can fund as little as $5,000 a month and up to $2.5 million for larger companies.
Why should you apply for our Bad credit small business loans?
Capital for Business has been serving small businesses for over 15 years and knows what the entrepreneur’s value the most. That is why we offer:
90% approval rates for poor or bad credit business loans.
custom-tailored service with a dedicated loan specialist.
reasonable eligibility requirements.
flexible repayment terms on a daily, weekly, bi-weekly, or monthly basis.
hassle-free application process.
Take advantage of our bad credit small business loans and bridge your capital shortfall. We are committed to helping you get the business funding you deserve, no matter what!