- If your business has bad credit, you can still get a business loan approved.
- Approach smaller lenders, have a solid business plan and never overstretch yourself financially.
- Get expert help who can research all the available loans and help prepare your business loan application.
Getting a business loan can be tough, and with bad credit it can often feel impossible. Don’t worry though – there are ways to get a business loan with a bad credit rating. It shouldn’t stop you from achieving the goals you have for your business.
Although there may be several reasons for your bad credit rating, doing your research and finding the right lender for you can increase your chances of getting your business loan approved.
What you need to know:
- There are different loan options for you such as secured business loans and loans offered by small lenders, rather than big banks and institutions that are more risk-averse.
- A detailed business plan and strong set of financial forecasts can really help you when trying to get a business loan with bad credit.
- A poor credit rating is actually much more common among business owners than non-business owners, so you’re definitely not alone!
How do I obtain a business loan with bad credit?
This is how you obtain a business loan with bad credit:
- Approach smaller, non-traditional lenders
- Consider secured bad credit business loans
- Shop around
1. Approach smaller, non-traditional lenders
Generally, you’ll want to approach smaller or non-traditional lenders rather than the big banks and financial institutions. Alternative lenders have more relaxed criteria for business loans and you’re less likely to be rejected due to bad credit.
2. Consider secured bad credit business loans
You should also consider secured bad credit business loans. You can use your assets, whether they are vehicles, properties or savings, as collateral to increase your chances of a lender approving your business loan.
3. Shop around
Make sure you research thoroughly and shop around. If you need expert help, go for it. They can do a better job of researching to find you a better deal for your business. It might take a bit more time, but it’ll be worth it in the end.
Other questions about getting business loans with bad credit:
You may have quite a few questions about getting your business loan with bad credit but these are some of the most frequently asked:
1. What do you need to apply?
This will depend on your individual lender but almost all of them will want to see your business financials before they decide on whether to approve your loan application.
2. How about using a personal loan for business finance instead?
This is an option, but it doesn’t usually give the flexibility of a business loan, so it’s probably not ideal as a first option.
3. How should I purchase the equipment I need?
You need to think about whether you want to purchase the equipment using a loan or simply lease the equipment. There are different options for both, but it’ll depend on how you plan to use the equipment, how long you need it for and how you intend to pay it back.
The way forward
Getting a business loan with a poor credit history can be the first step towards building a successful business and turning your finances around.
It’s vital that you don’t overstretch yourself and your business financially, so budget carefully and always make sure that you’re realistic with your repayments, and always pay them on time and in full.
