If you have bad credit but are interested in small business loans for your business, you may not be sure what your options are. Can you qualify for a small business loan even if you have a below-average credit score? Find out in this article now, and explore options for your business funding with bad credit in further detail.
Can I Qualify For A Traditional Small Business Loan With Bad Credit?
It is possible to get a traditional small business loan from a bank or credit union with bad or low credit score. However, you may pay a high-interest rate, and the lender will likely need to look closely at your finances to make sure that your business is stable and profitable.
In addition, many lenders require a FICO score of at least 600, or 550 for a short-term loan. If your credit score is not good, you still may not qualify. Even if you do qualify, you may have to pay high-interest rates. You may also need to put up collateral in order to get the cash you need – and if you can’t repay the loan, these assets may be seized.
Alternatives To Traditional Small Business Loans For Bad Credit
If you have a not favorable credit score, a traditional small business loan from a credit union or bank may not be the best option. There are a lot of other options for small business loans bad credit – and here are just a few of them.
Online small business loans – Online lenders are typically willing to take on more risk than banks, particularly if they specialize in small business loans for bad credit. You may have to pay a high-interest rate for online small business loans for bad credit – but your borrowing limits will be very flexible, and you may be able to take a loan out for anywhere from 1-10 years, depending on your needs.
Merchant Cash Advance (MCA) – A merchant cash advance (MCA) is not a loan at all. Instead, you sell a percentage of your future sales in exchange for a lump sum. If you borrow $10,000, for example, and sell 10% of your sales, your MCA provider will automatically take 10% of your revenue until the payback amount is repaid. This does not require a credit check, and is a very fast way to get cash.
Invoice factoring – If you have a lot of invoices, this is an option for fast cash. It’s not a loan. Instead, you sell your unpaid invoices for a percentage of their value (90%, for example) to a third-party invoice factoring company. You get this cash immediately, and the invoice factoring company is then responsible for collecting the debt they’re owed from the sold invoices.
It’s Possible To Get Small Business Loans With Bad Credit!
From traditional bank loans to online small business loans, MCAs, and invoice factoring, there are a lot of ways you can get the cash you need for your small business. So think about which option may be the best for you, and any questions you may have, feel free to contact us at Progressive Business Capital.
Can I Get Small Business Loans With Bad Credit?
If you have bad credit, you may not be able to get the best small business loans with the lowest rates. However, if your business meets revenue criteria, is profitable, and has been in operation for at least 1-2 years, you may be able to qualify for a loan with a credit score as low as 500-650.
In some cases, though, you may find that you are rejected by both online lenders and traditional small business loan providers. If this is the case, you may want to think about a different option, such as a Merchant Cash Advance (MCA).
With an MCA, the merchant cash advance provider will provide you with a lump sum payment in exchange for 10-20% of your future credit card sales. This “holdback” will be paid to the MCA provider until the lump sum and associated fees are repaid in full.
MCAs are not a loan, so your credit score doesn’t matter. If you are not having any luck finding small business loans for bad credit, an MCA may be the best option for you and your company. At ProBizCap, we can help you find both MCAs and traditional small business loans to get you the funding you need.
Get Business Funding Online With The Best Small Business Loans From ProBizCap
We are an experienced loan broker offering small business loans and merchant cash advances. Whether you want traditional small business loans or are interested in alternative methods of funding your business, ProBizCap is here to help.