Any business might need a business loan in this or that stage of its growth. Are you a business owner in need of a reliable loan, but you’re concerned because of your bad credit? Well, though poor credit can be frustrating, however, if you turn to a reputable high risk lender, you can get the necessary funds, such as a bad credit merchant cash advance, without difficulty.
Bad Credit isn’t a Final Verdict
Credit scores play a highly important role in making you be eligible for this or that type of business funding. To increase the likelihood of getting access, especially easy access, to the working capital you need, you should have high credit scores. They’re somewhat indicators of whether you’ll make loan payments or default.
According to 2018 data by MyFico, a provider of instant online access to consumers’ FICO scores, nearly 61% of consumers with credit scores of 579 and lower were likely to become delinquent. Credit scoring company FICO issues the following categories of credit scores, which are the most popular nowadays:
- 300-579: poor
- 580-669: fair
- 670-739: good
- 740-799: very good
- 800-850: excellent
So, what can you do if you have bad credit? It’s simple. You just need to find a reliable and experienced alternative online lender in the high risk field that can approve you for funding without challenges. With a true high risk business funding professional, you can easily get a secure and cheap bad credit merchant cash advance, and not only.
How to Get Bad Credit Business Funding
Now, let’s see what financing options you have for your high risk business and what’s important to take into account:
- First of all, know your most recent credit status.
- Check rates with all your lending options to figure out the best deal.
- Calculate your debt-to-income ratio by dividing all monthly debt payments by gross monthly income.
- Consider respectable alternative online lenders: they offer unmatched flexibility and easy access to working capital, such as a bad credit merchant cash advance. They’re mostly interested in your ability to pay back the funds you’ll get. So, your income is of special importance to them.
- Apply for the smallest amount possible for your low credit scores: this is more realistic.
- Turn to credit unions: their maximum allowable interest rate is 18%.
- Apply for a credit card loan: don’t fail to maintain good financial discipline and spend within the limits.
- Turn to your family or friends.
- Look for a co-signer: someone else’s high credit score can help you get a low cost loan.
- Use home equity.
- Apply for peer-to-peer (P2P) lending: you can find very flexible terms.
- Consider a personal installment lender: they don’t focus merely on your credit.
Finally, always work on improving your score. Pay special attention to your spending habits. If you pay on time on a regular basis, your score will start to get better.
To sum up, obtaining a business loan with bad credit may seem intimidating. However, if you work with the right provider in the high risk field, it’ll be more than possible.
Author Bio: As the FAM account executive, Michael Hollis has funded millions by using bad credit merchant cash advance solutions. His experience and extensive knowledge of the industry has made him finance expert at First American Merchant.