Bad Credit Business Loans 101
Typically, a FICO score between 350 and 580 is considered bad credit for small businesses. You could also have good personal credit but bad or limited business credit history and that could cause a problem with your business loan application.
Bad credit makes you less trustworthy in the eyes of lenders. You might have been quoted some exorbitant interest rates too. But we believe bad credit should not get in the way of your business goals and aspirations. At GConnectPro, we’ll help you get bad credit business loans that are right for you and your business.
With GConnectPro, choose from over 100+ lenders to find the best Loan for your business! We are in the business of helping businesses grow!
How to get approved?
Here are a few ways to get a Business Loan if you have Bad Credit
- Assure a Cash Downpayment: If your business has adequate cash flow despite poor credit then you are in a great position to qualify for bad credit business loans. You can provide cash down payment to cover a percentage of the costs related to purchasing business equipment.
- Provide Collateral: You can also leverage unpaid customer invoices, future credit/debit card transactions, and other assets to secure a short-term loan, even with bad credit. The emphasis is on your revenue and ability to pay back the loan, rather than your credit history.
- Personal Guarantee: If you have a good personal credit history, you might consider signing a personal guarantee for your business loan. If you sign a Personal Guarantee, then focus is more on your personal ability to pay back the loan, rather than the ability of the business.
- Apply for a Lower Amount: If your requirements are flexible, then taking a lesser amount of money than what you originally planned for could be an option. A lender offering bad credit business loans may be able to get you a smaller cash amount to start and then more if you pay it back on time.
- Get a Cosigner: Adding a cosigner implies that they are willing to share responsibility for the loan with you. You want a cosigner to have good credit and the ability to cover payments if you’re unable to keep up with them. This will give more assurance to the lender and you can get a loan on good terms.
Who qualifies for a Bad Credit Business Loan?
Personal Credit Score
Time in Business
Over 3 month
Registered in the US
Documents Required to apply for a Bad Credit Business Loan
Your personal identification
Proof of business ownership
Voided Business Check
YTD Balance Sheet
YTD Profit & Loss Statement
Business financials, including bank statements
2 years of Personal Tax Returns
2 years of Business Tax Returns
Certificate or license for the business
What are your Bad Credit Business Loan options?
- Business Credit Card: Although not a loan, a business credit card can help you get funds without any lengthy approval process. Use them for financing small amounts since they carry higher interest rates than other types of financing.
- Business Line of Credit: Like a credit card, this is also a revolving credit. You can for a business line of credit when you need working capital for expenses such as payroll and inventory.
- Invoice Factoring: If your business has unpaid receivables then you can turn them into cash using invoice factoring. The value of your invoices is the primary consideration for the factoring company, not your credit score.
- Equipment Financing: You can use this to finance the purchase of equipment using the equipment itself as collateral. This helps keep interest rates relatively low, although those with poor credit will likely pay more interest.
- Merchant Cash Advance: This can help your business get small-term cash advances based on the future card sales of your business, instead of collateral. This is suitable if your business receives a high volume of credit card payments.
- Microloans: Microloans are usually provided by non-profit organizations and are primarily intended for business owners living in underprivileged communities or for those who run socially responsible businesses.
Bad Credit Business Loan Application Process
with Global Connect Pro Financial
- Application form: Firstly, you need to fill out our online application form giving us basic details of your loan requirements.
- Advisor Call: Our Financial Adviser will call you to discuss your qualifications, loan options, and help you prepare for your loan application.
- Loan Application: Once all the documents are ready and qualifications are met, we’ll move on to the actual loan application with the lender.
- Loan Approval: Our Financial Advisers and Agents will keep in touch with the lender to ensure that your loan is approved at the earliest.