If you have a non-existent or low credit score, a standard bank can easily reject your loan application. This is a situation that most of the entrepreneurs find themselves in. Your credit rating is one of the things that you cannot hide or run away from. Even if the bank fails to give you a loan when your score is low, you still have other funding options. These can prevent your business from going bankrupt.
You need to fund the business in a way that allows you to boost your credit rating. When you are facing funding difficulties and have a low credit score, you should look beyond traditional lending. For instance, you can search for a microloan. This is a short term loan that is offered to small business owners looking for some capital. Most of the lenders offer a maximum amount of $ 50,000 as the microloan. You can use this cash to buy inventory for your business.
Microloan lenders put limitations on how you should use the loan. You are not allowed to use the money to refinance the debt or invest in real estate. If you are searching for a suitable microloan, compare different non-profit organizations or credit unions that are not very strict. The advantage is that they offer you the money without focusing on your credit score.
You can also get financial assistance with a poor credit rating from peer to peer lending. Different investors make use of an online platform to offer loans to business owners. They have to review your application and decide if you are eligible for a loan. You can get this loan faster than depending on conventional methods since they don’t have a lot of considerations. Though your credit score is not a determining factor, you risk losing your business if you default on payments. The loan is also accompanied by some high-interest rates which you have to pay every month.
Another funding option for bad credit is merchant cash advance. Here, the lender gives you a certain amount depending on your anticipated sales. You can pay back this loan by allowing transfers directly from your bank account from time to time. Try to find a merchant cash advance that does not come with excessive interest rates.
Alternatively, apply for a payday advance from quickpaydayadvance46know. Establish a proper plan on how you should make payments to avoid getting into worse financial problems. If you don’t want to deal with interests, look for grant opportunities. This is an excellent option since it is free money that you don’t have to pay back. You have to do extensive research for you to identify programs which are available for your business type. If you are in the health care field, you can easily qualify for a grant.
You can also get funds through invoice financing. Though the lender may not focus on your credit score, they have to look at your payment history before approving you. This can help them confirm that you can make the necessary payments on time.