How to get a business loan if you have bad credit?

How to get a business loan if you have bad credit?

Feb 5, 2018

If you need funding to start or grow your small business, but you have bad credit, you may feel that you will never be offered a bank loan. However, if you are not able to improve your credit in time to apply for your loan, here are some tips on how to get a business loan.

Small business administration (SBA) – This form of lender is accustomed to small businesses that are faced with roadblocks. It is best to approach an SBA lender at a small bank rather than bigger banks. It is important to note that even if one SBA rejects your application; you can always put through your form to another. Most SBA loans are approved with a personal guarantee which is usually on the owner’s home.

Revenue-based loan – Revenue-based loans are offered to businesses that have a steady cash flow and make regular bank deposits. Most banks will provide a loan of 10% of your annual deposits.

Merchant cash advance – This form of loan is offered in exchange for future credit card sales.

Internet lenders – These alternative lenders operate only on the internet and offer quick funding. Most of these lenders use analytic software and non-traditional means of assessing applicants. Often businesses that have been rejected by banks and SBA’s will receive funding from these sources. However, it is important to note that these loans come with extreme interest rates and feature strict terms.