Merchant Cash Advance
How to Get a Business Loan When You Have Poor Credit
A score between 300 – 579 is defined as poor by the credit reporting agency FICO. If this is your case, expect to face challenges when getting approved for a business loan, especially from a traditional provider. Here’s how you can get a business loan, such as a merchant cash advance (MCA), even if your score isn’t excellent.
Bad Credit Business Loans: Merchant Cash Advance
Have you been in business for less than a year? Well, the lender will pay attention to your personal credit score. If you’ve been running a business for more than 1 year, the loan provider will focus on the combination of your business and personal credit scores.
Let’s see how you can obtain a business loan with a low credit score:
Do Your Research
Well-done research can help you figure out which loan providers offer financing to businesses with a low credit score. This is especially important for those who have a score under 500.
Check Out Your Credit Report
Before applying to a loan provider, go through your credit report. You can get it from credit reporting agencies. See whether everything is OK on it. In case there is an error on the report, don’t leave it in ignorance.
Study the Lender
Have you found a provider that promises guaranteed approval for any merchant? This is a red flag. They’re usually fraudulent and are associated with heavy penalties.
Create a Proper Business Plan
A well-thought business plan is of vital importance. Also, have a presentation in place before talking to the lender.
Apply for an Alternative Online Lender
You’d better turn to an alternative online lender offering a merchant cash advance with the best possible terms and rates. Search for a quick and hassle-free application process, minimal paperwork, easy approval, and fast turnaround.
Consider Getting a Cosigner
A cosigner can increase your chances of getting a poor credit business loan. A cosigner with good credit will be on the hook for making the repayment of your loan if you fail.
Expect Higher Rates
Poor credit means higher rates for a business loan. Thankfully, the number of lenders paying attention to other business factors when judging your business’ creditworthiness is growing.
To wrap things up, the current economic situation is stricter than ever. A poor credit score (the one between 300 – 649) is no longer something that can keep you away from making your business dreams come true. This is thanks to the increasing number of alternative lenders in the financing field.
Author Bio: Michael Hollis is a Detroit native who has helped hundreds of business owners with their merchant cash advance solutions. He’s experimented with various occupations: computer programming, dog-training, accounting… But his favorite is the one he’s now doing — providing business funding for hard-working business owners across the country.
