We strive for personal excellence and personal satisfaction to attain happiness, but when you have bad personal credit, just getting a business loan could be all you need for contentment and success. It is important to understand the process involved in being approved for a small business loan and how bad personal credit might affect the decision and the terms of the loan.
As an entrepreneur, there may come a time when getting a loan will mean the difference between growing your business and going under. However, your low credit score might have a negative impact on your ability to get a business loan and how much you will pay for it.
Can You Get a Business Loan If You Have Bad Personal Credit?
When you walk into a bank to ask for a business loan, one of the first things they do is check your credit score. If you have bad personal credit, you might as well turn around and walk back out the door.
Banks can be very unforgiving when it comes to your personal credit history. With all the new laws and regulations regarding business loans, they want to be certain that there is little to no risk and that the loan will be repaid. If you have bad personal credit, to a bank, this is the equivalent of proof that you don’t pay your debts and as a result it is next to impossible to get a business loan.
Perhaps the most you will walk away with is a home equity line of credit. This requires that you put your own house up as collateral to cover the loan and if you have any difficulties making payments, you may not have your business or any place to live.
Are There Alternatives to a Business Loan for Those With Bad Personal Credit?
Instead of seeking business loans from traditional banks, more and more small business owners are turning to alternative lenders for help. Nevertheless, it is crucial that you choose the one that is right for your small business.
Cash advance companies, like Financing Solutions (www.fundmypayroll.com), are ideal for business owners with bad personal credit. They tend to be more lenient than banks or other types of lenders.
At Financing Solutions, they will work with you to obtain the instant business financing you need to make payroll, purchase supplies, or take advantage of opportunities for growth. They look beyond your bad personal credit to consider other factors such as your business success as demonstrated by your account receivables and your current payment habits.
More than 90 percent of the businesses that apply for immediate business funding from Financing Solutions are approved. In addition, most businesses are able to repay the money in just a few weeks or months, when the cash flow situation improves.
How Much Do You Know About Bad Personal Credit?
Credit score ratings, available credit, and more than one rating bureau — it can all be somewhat confusing. However, as a business owner, you must understand how the various terms can affect the future of your business.
First, you have to find out your credit score. For anything lower than 700, it may be tough to get a business loan or you might be stuck paying expensive fees. You can find many tools online to help you repair your bad personal credit.
Until you do, turn to Financing Solutions for short term business funding. They exist to help entrepreneurs just like you.