Getting a loan with bad credit can be a challenging task for any business owner. A less than stellar credit score can follow you around like a bad penny, and unfortunately, it can seriously limit the number of funding options available. But, there are choices available that can both jumpstart your business and actually help you get your credit back on track. The following are just a few ideas for getting a loan with bad credit.
Don’t Count on Bank Loans
Bank financing has become far less common than it was previously for businesses. Why? Despite improvements with the economy, banks are still reluctant to lend money, particularly to those with poor or no credit. And, there are more options than ever for getting a loan with bad credit that don’t rely as much on your credit rating.
Friends and Relatives
More than 50% of all business owners get some financing help from friends or relatives. More than likely, these people want to see you succeed in your venture, and a few might be willing to help finance it. Not only is this type of funding typically more readily available, usually the interest rates are far more favorable, too!
One of the newest options is nonbank lenders such as Kabbage that offer fast, flexible funding for online businesses. Unlike banks that base what they will lend almost exclusively on your credit rating, these lenders look at multiple types of data including social media engagement and online ratings. Oftentimes, these types of funding are particularly beneficial for getting cash quickly to purchase inventory or hire seasonal help.
Credit cards are typically much easier to obtain than bank loans. So they are a viable alternative to getting a loan with bad credit. That being said, they also typically come with high interest rates. So, business owners are wise to use credit cards carefully when it comes to funding a business.
There are both government and private grant programs available to businesses. Of course, there is fierce competition for this type of funding, but it’s worth a shot. Many of these programs are focused on particular industries, geographic areas, or certain types of business owners, such as women and minorities. There are other types of freebies that might be worth exploring, as well, such as free office space, business plan assistance, and more that can help reduce the cost of starting a business.
BarNone (1-800-BarNone) is a lead generation company based in Oakland, California. BarNone was founded in 1995 and was later purchased by the First Advantage Corporation in 2005 for their Dealer Services segment. They were later sold to Centrro, Inc. in August 2009.
BarNone connects consumers seeking an auto loan with auto dealerships...