Bad Credit Business Loans

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If you are a small business owner or entrepreneur and you have a bad personal credit score, it is going to be tough to get a small business loan.  It is not impossible, but it is going to be tough.  There are a few different solutions that you can think about when you have a poor personal credit score.

There are solutions for small business owners to receive a small business loan that have a poor personal credit score

One of the most important steps any small business owner or entrepreneur must take when starting or growing their business is to separate their personal credit portfolio from there business credit portfolio.  Yes, they are different and must be treated as such.  Operating and funding your business on your personal credit score leave you open to overwhelming liability if anything were to go wrong with your business.  Not only does it leave you liable for certain issues that may come up, but it also allows you to grow your business with more access to capital then if you were using your personal credit score.

There is 5 times more capital available to a small business using business credit rather then personal credit

Start building your business credit

Building business credit will also show potential investors and buyers that you are serious about your business and that you know what you are doing when it comes to your businesses operations.  Lastly, if you have spent the time building your business credit scores, you can be approved for an unsecured business loan and never have to deal with your personal credit score in your business.

If you do not have the time to build your business credit score and you need funds right away, there are a few different small business loan programs that you can take advantage of.  These loan programs are going to have higher interest rates but offer cash very quickly into your business.

Retail Merchant Cash Advance Loan – This kind of loan is based on your future credit card receivables.  A merchant cash advance lender will give you cash up front and then take your credit card sales as they come in

Purchase Order Financing Loan- If you have just been awarded a contract but you do not have the capital to fulfill the contract, a PO financing lender will front you the cash and you will repay the loan once you receive the funds from your customer.

Accounts Receivable Financing Loan- If you have customers that you know owe you money and you know thy will be paying you in the near future but you need cash to operate your business today, an accounts receivable financing lender will front you the cash and you will repay the loan as your customers pay you.

Factoring Invoice Loan – This is the same as Accounts Receivable Financing but in this case the lender buys your receivables and now the lender is responsible for collecting the money from your customers.  You do not pay this loan back. 

A lender is still going to check your credit when applying for the above loans however, your credit does not need to be the best to be approved for these kinds of loans.

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