How to Get a Business Loan with Bad Credit

Bad credit can affect your business in many ways; such as difficulty in purchasing inventory, higher A.P.R. on existing credit, and the inability to get approved for business loans.

You already know that you’re spending money just to make your money growing. Whenever you will be starting your business, it is very common knowledge to all of us that plenty of money somehow must be spent out before you will ever see a dime of profit. This is why many fledgling business owners need a business loan. And it is quite tough to secure a business loan when your credit is bad.

You’ve decided that you’d like to get a business loan, but you have bad credit. You know that it might be hard to get a business loan with your bad credit, if you are not out and out declined. You know that the worse your credit, the higher your monthly interest payments will be. You know a business loan will help you, but you don’t want it to sink you in three months.

How to Get a Business Loan with Bad Credit

As you may well know, small businesses are suffering tremendously in this economy. Businesses are now closing at a very alarming rate. Lots of those were not able to close yet were barely don’t know where to go. It should come as no surprise that when this recession finally ends (it will end soon) a lot of these businesses are going to show the scares of this recession in the form of bad credit.

Firstly, you should come to terms with the fact that your bad credit is going to make it much more difficult for you to get a business loan. You will have to take several extra steps to get lenders interested in giving you a loan. Consider your certain apprehension if a friend of yours known for not paying back her debts asked you for $150,000. You wouldn’t even consider it! So, why would a business lender make exceptions for you? Your bad credit signals a high-risk investment and if there’s one thing lenders hate, it’s high-risk anything!

If you want to get the very best deal on a business loan you will need to first repair your credit. Do not worry about having to pay credit repair companies or credit attorneys thousands of dollars, publishes a complete guide that will show you exactly what you need to do to increase your credit score.

It’s not all dark and dismal, however. You can definitely get a business loan with bad credit if you have a credit-worthy co-signer (say, a parent or a particularly loyal friend). What is a co-signer, you ask? It’s exactly what it sounds like; your relative or acquaintance will sign for your business loan as a co-borrower. Just as with any other type of loan, a co-signer is one of the most common and time-tested ways to get a business loans when your credit is less than excellent. Just be sure to mind your co-signer that they are entering a legally binding agreement. If you fail to pay your debts, your co-signer will be totally responsible and both your credit scores could take a nosedive. The easiest way to build your credit back up, however, is to use a co-signer to get a loan and make your payments on time every time.

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Get an Unsecured Business Loan with Bad Credit

Most of the time, people are referring to bad PERSONAL credit, not bad BUSINESS credit. So, the answer is simple: If you already had a bad credit loan, everything you need is to build the best corporate credit just to get a business loans. When you will be setting up on your corporate loan correctly, your personal credit should not be a factor. Unsecured business loans would follow the same requirements as a construction loan. It would generally be handled as a bank line of credit and the current lending criteria for such a bank loan would be: Over twelve business accounts for creditor are reporting favorably having 6 months as minimum payment on the accounts. In addition, an 80 PayDex score and two years in business from the date of incorporation are required.

Getting a loan is not an easy process for anyone, but it is made more difficult if you have bad credit and you have not collateral for the loan. When no assets are available to borrow against, this is called an unsecured loan. An unsecured loan with bad credit is an especially difficult situation, but it is not impossible to get a loan with bad credit. Follow these steps:

Get an Unsecured Business Loan with Bad Credit

I recently filmed a video on how to get unsecured business loans with bad credit, but I wanted to expand on it a little due to some good questions that came up.

But there is another, more creative, solution to this problem. If the small business owner had built perfect business credit from the ground up, as I teach, then within 12 months they would have acquired several cash credit cards. What are cash credit cards? Visa, MasterCard, Discover, AMX and so on. This is opposed to vender credit cards such as: Home Depot, Officemax, etc.

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As an added benefit, unlike personal credit, the more one uses their corporate credit, the better their business credit gets. You have probably heard that in order to have excellent personal credit, one should not use more that 30% of the available credit, right? Well with corporate credit, those rules don’t apply. The more you use, the better your score gets.

Do you see where I’m going with this? If you have an unsecured business loan with a $50,000 credit limit is not that basically a bank line of credit? Well, of course it is. And it is much easier to access than having to go the traditional route of getting a bank line of credit. So as a much quicker solution to the problem, one would get business credit cards without personal guarantees, which is exactly what I teach in my free 5-day eCourse for small business owners. If they follow my step-by-step plan of attack, they should have close to $100,000 in unsecured business credit lines.

If you found this inside information helpful, I’ve put together more video tips as well as a free 5-day email course on how to do establish perfect business credit from the ground up.


Do Business Loans and Bad Credit Mix?

The mix of business loans and bad credit ratings seems to be a bad one. After all, having a low rating usually means have poor loan terms, making the pressure of repaying the debt even greater. But, in fact, getting business loans with bad credit scores can be a very sound move.

Is your money shrinking and you feel like you need a business loan? Too many people feel the pressure of throwing together a loan package quickly. These are three identifiable and proven ways to improve your chances of getting a business loan.

Apply for a business loan with your business name instead of your given name: For instance, use your business loan, “Sarah’s Block Company” versus your given name – “Sara Smart.” The reason you need to apply for a business loan in your business name is because it is a business loan and not a personal loan.

Do Business Loans and Bad Credit Mix?


Business loans for bad credit: Normally, these are two words that you will never see or hear in the same sentence unless, of course, they are followed by the word denied.

Business owners have long worried that their poor credit scores will inhibit them from getting money for their businesses, and this has been increasingly true. This can be avoided with a business cash advance. Interested business owners simply need to complete a short application, and provide their business cash advance lender with at least the four most recent months of their business’s credit card statements. Once the business cash advance has been approved, the account of their choice can be funded in as little as ten business days.

In the business world, business loans and credit both depend on and determine one another. For example, your credit score plays a major factor in whether or not you can get a business loan, and your business loan repayment habits can either increase or decrease your credit score.

The advantage is not always obvious with the act of taking on a new debt despite the pressure of existing ones seeming to be a step backwards. But the extra cash that is secured can play a key role in alleviating the pressure. The only trick is how to get approval with poor credit scores on a loan deal that is affordable.

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But there is a method of increasingly used business financing that ends the enmity between business financing and bad credit: The business cash advance. With a business cash advance, your credit report score is quiet virtually irrelevant. Your business cash loans are lent basing upon your business performance, not based on your personal financial history. Therefore, a business that processes at least $2,500 in credit card sales every month is eligible for a business cash advance if it has been in operation for at least four months, has one year or more remaining on its lease and its owner has no unresolved bankruptcies.

Now, when it comes to getting money for your business, the term “bad credit business loan” is no longer a paradox, because with a business cash advance, your personal credit score does not determine if, and how much money you can get for your business.