How to Get a Small Business Loan When You Have Ok or Bad Credit

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How to Get a Small Business Loan When You Have Ok or Bad Credit

Getting a Business Loan with Ok or Bad Credit

Let’s say that you’ve found yourself in a position to expand your business. However, you might have discovered that decisions that you’d made as a younger business owner are hurting you today. Searching for a small business loan when you have OK or poor credit can be killer. Whether you took too many risks earlier in your business or financial barriers are getting in the way, a lot could hurt your chances at expansion.

A massive factor that few businesses realize is that an OK or a bad personal credit score can impact your ability to qualify for a loan. If you have a FICO score less than 700, then there are fewer options available to you. A lot of clients have found themselves in situations like this. In order to help you, we wanted to share three of our favorite tips for businesses that need a bit of help recovering.

Three Tips to Make OK or Bad Credit Good When Looking for Business Loans

Improve Your Credit

Even when small business loan approvals are at a good level, a bad credit history can get in the way. It is vital to know not only your own credit score, but your business credit score as well. Being on top of your credit score is one of the most important factors in understanding how to get loans. It is the first thing that a bank or lender will look at when determining whether to give you their money. Fixing your own OK or bad credit score is key, and it is something that you should try to fix before getting loans for your small business.

Know the Lending Ecosystem

If you understand the Small Business Lending Ecosystem, finding loans in 2020 shouldn’t be hard. In many senses, the lending ecosystem is more about learning how banks and lenders and financing all folds into itself. Lenders range in size and scope from small and independent start-ups to big banks with names everyone knows. When it comes to getting a loan, it is more about finding the personal fit than it is about making it work for just your business. Having OK or bad credit can be burdensome but going through banks isn’t the only way to get a small business loan. We have written a lot about the lending ecosystem, but we highly encourage checking out that article above. It’s super informative when it comes to understanding the different types of loans and such that you could find.

Find the Right Provider – Or Providers – for You

Continuing the idea of the lending ecosystem from above, we wanted to show you have to understand this lending style. If you find that you are not a good fit for a large bank because of debt or OK/bad credit or any other common factor for businesses, then there are ways around it to get a loan. Sometimes it comes in the form of places like Lendio or Lending Tree, other times it is special non-profit lending groups. There might even be times that a marketplace lender is the proper route to go down. It is different for every business, and it is important to know what is right for your small business before you jump into something that you can’t sustain.

Every business is different, and we want to be able to help you however we can. Whether you want to improve OK or bad credit or find a business loan through outsider means, we are here for you. If the tips outlined above aren’t enough, let us know! We would be happy to have a complimentary phone call to get into deeper detail about what an OK or a bad credit history can do for finding small business loans, or whatever other situation might be impacting you.

Examples of Small Business Debt Financing Options For OK or Bad Credit

Alternative Lenders

Alternative lenders have most relaxed lending requirements, and they tend to be the go-to lender of choice if denied an SBA or commercial loan. They are fast and provide funds quickly. They do, however, come with fees and high interest rates, which is the price paid for laxer eligibility requirements. They will likely ask for a personal guarantee for any small business with a credit score lower than 700. They may ask for someone to co-sign the loan if you have a credit score under 600. The co-signer will need to be able to show that he or she has the collateral to cover the loan if the business defaults

Peer to Peer

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Summary

It is important to note that this lists are exhaustive. They are intended to provide background on some of the more common forms of financing available for small business with OK or bad credit. Each business has a unique set of circumstances, which need to be considered before deciding which is best for them.  We would be happy to walk you through all of your available options.

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