Every person has an entrepreneurial seed waiting to sprout, and if you’re one of those who wants to start nurturing this seed and watch it grow, it’s time for you to launch your business. However, starting a business isn’t as straightforward as you think—there are many factors to consider and this includes your finances.
Some people will require additional finances to grow a business, and because of this, applying for a business loan may be a great option. But if you have a bad credit score, this might be more challenging and require more consideration.
Having a bad credit score means you’ll need to look for alternative financing options that could help finance your business, despite your less than desirable financial history in the lender’s perspective. Not to mention, you should also see how this could affect your business in the future.
So before you apply for a business loan or working capital loan, it’s best to ask yourself the tough questions and see if it’s the right time for you to obtain a bad business credit loan.
Question #1: Do I Have Collateral That Can Offset My Bad Business Credit?
People with a big-ticket item, such as a house, could use this as collateral, so your business’s bad credit score won’t be much of a problem. Seeing that this could change the game of your loan, you can expect financial institutions to ask you this question first. But if you don’t have collateral to put up, it may be best to apply for a bad credit business loan from another lending option.
Questions #2: Am I Aware of My Business’s Credit Score?
Before you get financial assistance from a bank or lender, you need to know your credit score. If your business’s credit score is too low, you may not meet the requirements to get a loan, so you could be just wasting your time. But if you know your credit score, you can make the process much easier, giving you more chances of obtaining a loan.
Question #3: Can I Wait and Build My Credit Score?
If you’re willing to be patient and make an effort to improve your credit score, you may end up with lower interest rates and more flexible payment terms, improving your overall financial experience. By taking the time to improve your credit score, you’ll have an easier application process since your financial health is much better, allowing you to repay your loan.
Question #4: Can I Get Funds from Micro-Lenders?
Another alternative you can get is by working with investors, micro-lending, and other avenues for a cash influx. With this approach, you can get deals with lower money, but decent enough or borrowing.
Of course, getting a working capital loan is much better, so you have sufficient money to help kickstart your business.
The Bottom Line: There are Effective Financial Solutions to Help Fund Your Business
Having bad credit can feel pretty disheartening, but that shouldn’t be the case. Fortunately, there are different options for individuals who want to start a business, such as working capital loans. All you need to do is work with the right lender to help understand your financial situation and see which loan route you should go for based on your credit.
How Can We Help You?
Are you looking for working capital loans in Alabama? If so, Porter Capital is here to help.
We offer working capital solutions to businesses all over the US in various industries. Being a direct lender and factoring company, we provided over $6 billion in funding ever since we started. From invoice factoring to dip financing, working capital loans to asset-based lending — we’ve got you covered.
Learn more about our services today!