If you have poor to fair credit, which is any personal credit score below 630, you’re often out of luck when it comes to getting loans from traditional lenders. However, many alternative sources such as Premier Business Lending and nonprofit lenders believe that credit scores are not always the most important factor to consider, and they have stepped in to fill this funding gap.
Small business owners frequently have trouble getting funds from traditional lenders because they often cannot meet the strict requirements. Small business owners with bad credit face even more obstacles when getting financing, even from some alternative lenders. If you are able to secure a loan, you’ll typically see much higher APRs and fees. It’s important for borrowers to pay attention to rates, fees and terms when evaluating loan options for their business. Certain lenders will also require collateral or personal guarantees to secure loans. Premier Business Lending has several options from a product standpoint in order to help todays small business owners. Before you agree to accept funds from a lender, be sure that you understand the terms and risks associated with the offer.
The best way to take advantage of a business loan if you have bad credit is to have a strong business plan with clear goals. You should also be making every effort to repair your bad credit, which can include paying your bills on time, cutting costs and reducing credit card usage. You can check your credit report for free once a year, so keep track of the progress you are making. It can take years to fix a damaged credit score, but actively taking steps toward improvement will benefit you and your business in the long-run.
Besides traditional term loans and lines of credit, small business owners with bad credit should also consider other ways of getting funds such as secured small business credit cards, invoice factoring, merchant cash advances, personal loans and business grants.
Indeed, there are reasons for continued optimism for small business owners in the new year:
1) Although rates went up, the increase was small, which is good news for borrowers seeking capital. The hike was something for credibility, since they signaled a change for months, rather than actual impact. Lenders are showing signs of opening up the purse strings. The flow of capital is the life blood of small business. Big banks and institutional lenders are approving higher percentages of loan applications, and smaller banks are granting about half of the requests.
2) While the Fed signaled, it would raise rates in 2017, the amounts will likely again be small. It is better than being overaggressive, and the rest of the world’s economy is not growing. Incremental increases give the Fed the ability to measure impacts.
There has been an influx in equipment leasing we have seen in the first quarter of 2017 which shows economic structure and balance. Rather it is a short term working capital loan, a bridge loan or an equipment purchase Premier Business Lending has shown the ability to help guide business owners through the sometimes-confusing financing industry. This is one of the key principles in which the company was founded, truly being an educational resource to business owners.