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.
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, Fasttracktogoodcredit.com 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.