One of the most anxiety-filled moments in the process of qualifying for a loan is the credit check. If your credit is strong, you have little to worry about; however, if your score is lower than you’d like, there might be some tense, uncertain moments when you’re trying to qualify for a loan. If you’re starting your own business and trying to get a loan to finance this dream, don’t be discouraged if you have poor credit. Even if you fall into this category, there are ways for you to get the financing you need and get your business off the ground. The following are ways to get a small loan with bad credit.
Crowdfunding
This method of obtaining the money you need to finance your new business is relatively new and growing in popularity. The great news is, your credit score has little to do with your ability to generate the cash you need. That’s because this is more like a campaign than an application for a loan. Business loans for bad credit is guaranteed with this method. You can go to a site such as kickstarter.com and launch your campaign by setting a goal to raise a specific amount of money by a certain time. Then, people can pledge small amounts to contribute toward that goal. The small amounts can easily add up and give you the total you need in a relatively short time.
Unsecured Small Business Loan
You’re probably familiar with the distinction between secured loans and unsecured loans. With secured loans, collateral such as a home, automobile or even retirement account is necessary to getting the loan. But unsecured loans require nothing of the sort. Both of these types are available with business loans. You can get a small loan with bad credit using an unsecured business loan. With this type, you can get fast approval at favorable rates and terms. Plus, your lender will be willing to work with you in setting up a payment that works best for both parties. Approval rates are very high, even if your credit is low.
Microloans
If your credit isn’t at a level you’re comfortable with or that would otherwise disqualify you from getting traditional loans, try some alternative methods. One of these is microloans. There are a number of online resources where private lenders are willing to lend as little as $5,000 and as much as $25,000 to startup businesses. Though interest rates will be a little higher for this type of loan, credit scores are not weighted nearly as much as they are with traditional lending, so this can be an attractive option for you.
Talk to Family and Friends
If you have a good network of family members and friends, and if you feel comfortable, ask them to help you out in getting your business going. In this way, you can receive business loans for bad credit guaranteed. More than likely, a close relationship will be lenient with repayment terms and may require no interest.
Bad credit doesn’t necessarily mean no loan for you. There are options for you to consider.
