Yes, You Can Get a Business Loan Even with Bad Credit
As you must already know, maintaining a north of average credit score is greatly important for those who run a small business. This can be particularly vital when you’re looking for additional working capital, and are thinking of applying for a small business loan.If your credit score is low, getting approved could be a challenge.
The good news is, it’s possible to get that loan even if you have poor credit, and below are pointers to help you do that:
Have a Concrete Business Plan
When you apply for a small business loan having a low credit score, it will be wise to prepare a solid business plan that you can show to your potential lender.This will surely help to prove to them that you can manage repaying a loan.Be prepared to reveal your monthly sales and hopefully any improvements in your business’s finances.Even with a less than stellar credit score, a lender may be more likely to work with you if you can show an upward movement on your financial growth trajectory.
Improve Your Credit Score
Begin by scanning your business credit report to spot and iron out irregularities, if any.Remember that improving your score can’t be done overnight.You have to form good financial habits and let the credit bureaus see for themselves over time.If you’re not in a hurry to get financing, then focus on boosting your score, and then go apply.
Get a Merchant Cash Advance
A merchant cash advance is, like a loan, a type of business financing, but it is an entirely different product.With a cash advance, you get lump sum financing which you repay by giving your provider a certain percentage of your personal credit card sales.Therefore, even if your business’s credit score is under average, if you have constant credit card sales, you can still be approved for this option.
Be Responsible with Bills
Late bills payment can pull down your credit score, so avoid this completely moving forward.Below are tips to help you pay your bills on-time:
Be guided by a monthly calendar: If you’re always at a loss when it comes to your bill deadlines, use a calendar that will send you alerts every time a due date approaches.
Polish your budget: If you usually pay your bills late because of cash shortage, it may be time to improve your budget so that your expenses can be adequately covered.
Get help from apps: There are many financial apps that can help you manage their bills. They’re usually for free, although if you want more advanced features, you will have to pay a fee n most cases, they are free, but advanced features will naturally come with a price.