Is your credit history less than stellar? Did you make some financial mistakes in the past that you’re still paying for today?
Bad credit is an obstacle that many Americans are facing. Unfortunately, having poor credit immediately lowers your chances of qualifying for a traditional bank loan, but there are other options available. If you have bad credit, the following choices may be worth considering:
Non-profit organizations serve as intermediaries and loan small lump sums of cash to entrepreneurs and small business owners. The average microloan is only about $13,000, so these organizations are probably more likely to lend to those with bad credit than many banks would be. Microloans also allow you to rebuild a poor credit score; the amount is small, so it can be repaid on time more easily. The downside of microloans is that the interest rates associated with them can be steep.
2. Merchant Cash Advances
Cash advance companies supply borrowers with money in return for future profits. Even if you have a poor credit score and no collateral, merchant cash advance providers will often lend money to you anyway. The catch is that the interest rates are rather hefty, sometimes approaching 30-40 percent over a six-month term.
Providing collateral to back up your loan at least gives banks the reassurance that you have something to fall back on if you cannot repay the loan. Keep in mind, though, the risks involved in putting something up for collateral. If your business fails and you are unable to return the loan, the bank gains ownership of whatever possession you used as collateral.
4. Private Investor Companies
Many of these companies are willing to take the risk and invest money in a business whose owner has a poor credit history. They do, however, often charge a premium for this added risk.
Biz2Credit can help you figure out the best path to take. Loan specialists can help you navigate through the array of options to pick the one most suitable to your business. Visit the website or call (877) 861-2210 for help.