SunWise Capital 2018: How to Get a Business Loan for Poor Credit
Small businesses are also relying on loans to survive the everyday challenges that come along the way, but small business owners loan applications are declined or denied by lenders if they have a poor credit. You probably have experienced being denied for a loan application because of a poor credit due to improper management of your finances in the past, but it should not be a hindrance for you not to get the financial help you need. The good news is that it is possible to secure a small business loan even if you have a poor credit. You’ll find trusted and reputable alternative lending companies or lenders offering excellent loan solutions for poor credit. Instead of focusing entirely on your credit score, these types of lenders give utmost value to the operating history and the business’ strengths.
As you probably know, the worse your credit is, the higher lenders perceive risk, so it is crucial to show your lender that you have a good business plan and detailed financial projections. Your options may include microloan, merchant cash advance, business credit card, home equity line of credit, revenue-based loans, or borrowing from family and friends. With a microloan, a small business owner can borrow up to a maximum of $50,000, easier to apply and get approved, and this type of loan is usually offered by alternative lenders such as credit unions. The credit requirements for microloans are lower. On the other hand, a merchant cash advance is also referred to as a business card cash advance, which is applicable for those with cash flow issues and needing $10,000 or less. Cash advances are usually at high-interest rates, most especially if you miss even a single payment, so make sure that you repay your loan on time.
You may want to take advantage getting a credit card using your business name, make purchases, pay on-time, and establish a good credit at the same time. There will be a varying interest rate, credit limit, and terms of payment. House equity loan refers to putting up your property as a collateral to secure a small business bank loan. Revenue-based loans require an annual sales of more than $100,000 a year, a credit score of over 550, and the loan amount should not exceed ten percent of your business revenue. The least thing you want to do is to borrow from your family and friends, so it is best to get a loan from a trusted and reputable small business loan lender today.
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