Can I Get a Business Loan If I Have Declared Bankruptcy?
We can declare war or declare independence and face the consequences, but if you have declared bankruptcy, you may be wondering if you can still get a business loan. Although bankruptcy can be devastating, it does not have to mean the end of the world.
Approximately one million people file for bankruptcy each year in this country, so you are not alone. Sometimes, declaring bankruptcy is the only way to get out from under debt so you can start again with a clean slate. However, it also makes certain things more difficult, such as insuring a vehicle, purchasing a home or applying for a business loan.
Business Loans after Bankruptcy
For a small percentage of entrepreneurs, it may be possible to obtain a business loan from a bank after bankruptcy. However, you should be prepared for an uphill battle, lengthy applications, endless questions and possibly lots of rejections.
Since banks consider you such a huge credit risk, there will be numerous hoops to jumps through. For example, you will have to prove beyond a doubt that your situation has improved and that you have not accumulated too much more debt since the bankruptcy. Additionally, they will ask for a business plan and maybe even an explanation for your previous financial difficulties. In other words, they will want to know how you plan to repay the money.
You will probably have to repeat this process several times at different banks as you shop around for a sympathetic lender. Also, if you do get lucky enough to acquire a bank loan, you can expect to pay a higher interest rate than normal.
Other Options for Small Business Funding after Bankruptcy
Of course, you can decide to skip all this and turn to an alternative lender instead of fighting for a business bank loan. You may find their policies and conditions easier to handle than those of a traditional bank.
Your best option is to choose a cash advance company, like Financing Solutions (www.fundmypayroll.com). Managed by serial entrepreneurs who truly understand what it is really like to run a business, they will look at your application for business funding in a more favorable light.
Even if you have declared bankruptcy, you may still be eligible for short term business financing. Financing Solutions will base their decision on factors such as how long it’s been since you declared bankruptcy and whether you are now working to improve your credit history by paying your bills. If everything is currently up to date and paid, you are likely to be approved.
Unlike bank loans which come with conditions and restrictions, a cash advance can be used for any business need, such as making payroll, purchasing supplies or building working capital. This can also be very helpful when you are experiencing an accounts receivable gap, because after a bankruptcy, you don’t want to be late in handling your own bills because you are waiting 30, 60 or 90 days for your customers to pay.
Even after a bankruptcy, you still have to work hard to make your business a success. With a cash advance solution you can focus less on your former bankruptcy and more on growing your business.
Important Steps to Take After Bankruptcy
Today, it seems almost everything in life is connected to your credit score, and more activities get added to this list constantly. Simple acts like purchasing a new cell phone or renting personal or business property cannot be accomplished in you have a low credit score.
Unfortunately, a bankruptcy filing can stay on your credit report for up to ten years, so anytime someone checks your credit, that’s what they will see. Therefore, one of the most important steps to take after you have declared bankruptcy is to immediately work on raising your credit score.
Perhaps the first step to take is to evaluate your finances, determine what went wrong and make corrections. Then, you must adopt the habit of paying all your bills on time.
In addition you can apply for a secured credit card. These have a low annual fee and the amount you can charge is based on your initial deposit. The limit is low but it is a good way to start rebuilding your credit and credit score.
Nevertheless, while you are working on enhancing your credit score, you can still look to a cash advance company for immediate business financing. It’s like having an emergency backup, just in case.