How to Get Small Business Loan Despite Bad Credit Ratings
Bad credit stops small business borrowers from obtaining new loans or small business credit cards with good terms. Lenders generally don’t offer credit lines to those whom fall into high-risk category loan applications. Using sound business principles, they reserve their offers to those people who have good credit ratings.
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by Iron Dane Richards Credit Books – Credit Mastery Series – February 15 2015 – ISBN-13: 978-1507650417 – ISBN-10: 1507650418 – BISAC: Business & Economics / Personal Finance / General
The Reality Check: With Bad Credit it is hard to qualify for decent credit lines at competitive rates and in all terms it comes at higher costs. Unless …
Good News you can get bad credit financing using Credit Mastery.
Looking for bad credit small business loans options? This article is expressly for those who have the dreaded bad credit rating! While it might surprise and delight a few of you, that there are small business loans for people with bad credit ratings!
Now you may be asking yourself, how can I get bad credit business financing? Read on ….
To be completely upfront, forget going to banks until you have corrected your credit files. No bank that is going to stay in business for another month is going to touch your business loan if you have personal credit history with scores less than 680.
Good news again, there are more sources for small business lending than just banks.
For these types of lenders, they do not totally ignore your personal and/or business credit scores, these are still a gauge for a lender, however not to the same scale as a bank.
Credit score in a capsule, your credit score is based from an algorithm that is gives a numeric result to be used by the credit reporting agencies to calculate your credit worthiness or lack thereof. This algorithm score comes in hundreds of variants that take in multiple factors that are used to compile your overall score.
Did you know these factors also make you a bad credit candidate:
• Non Sufficient Fund or Returned Checks
• Any Recent Late Payments
• Past History of Bankruptcy(s)
• Credit Write-offs and Settlements
• Any Past Credit Accounts that are In Arrears
• Too Many Credit Inquiries
Remember this, the more recently your payment has not cleared, the more difficult it will become for you to get any type of funding.
Best practices for initiate before applying for bad credit loans:
• First, completely separate your business credit from your personal credit by forming a legal entity such as a corporation or Limited Liability Company (LLC) and then you must apply for an Employer Identification Number (EIN).
• Next, use this EIN to establish your initial business credit profile as this in the beginning step to separating you from your legal entity.
• Then, you must build a strong business credit profile while repairing your personal credit – we suggest the Credit Mastery : Business Credit – Personal Credit book by Iron Dane Richards for the best results.
• Finally, you will need to prepare current financial statements on your business.
Business Cash Advance, a Good Alternative?
You can also opt for getting a business cash advance. A business cash advance is not considered a normal loan and the lenders who offer cash advances will recoup their money from your businesses credit card sales, This allows the lender to start reducing the funds lent on a weekly or even daily basis. There are quite a few cash advance lenders online which provide such cash advance services . This can provide a cash advance for those unexpected or seasonal working capital needs. They usually provide funds to people into restaurant, retail or service industry that can prove the processing at least $4000 to $10,000 in credit card receipts per month.
Keep in mind that these cash advances are at high interest rates and many who have used them are trapped into an endless loop of continual payments almost as tough as a payday loan.
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