You have bad credit, but you really need some financial backing which if you fail to secure might mean trouble for your company. What options do you have?
First, forget about offline solutions, all great options will be online.
Note that for any score above 640 you can access medium-term or SBA loans which are excellent because they may most likely come with one-digit rates. Bad credit is anything below the 640 mark. Here are solutions for you if you fall in that category.
Bad Credit Business Loans—With Collateral
One smart way to offset a poor score is to have an asset you can use as collateral which lending companies do ask for. But collateral doesn’t mean risking your family home or car. These days some online lenders propose loan options that use your business’ invoices or equipment as collateral— which makes securing the business financing much easier.
Examples of small business loans with collateral for bad credit include:
- Invoice Financing—only for businesses that invoice their customers (and these customers should be other businesses).
- Equipment financing— for equipment purchases where you can use the equipment you expect to buy as guarantee.
Short-term loans may be the right pick for micro-business owners seeking bad credit business loans with made-to-order structures.
Their terms last 3 to18 months. They have daily-ACH repayment plan (all business days, exclusive of bank holidays). However, they have comparatively higher APRs and this daily-payments structure may impinge on you cash flow.
Merchant Cash Advances
Merchant cash advances are taking over the bad credit business lending industry.
But be cautious when applying for a business cash advance bad credit. While they may be nice and quick, a poorly-designed product may weigh heavily on you.
With Merchant Cash advances, the lending company gives you (in advance) a discussed amount of cash which you repay in full, plus fees deducted from your every day credit-card sales.
The lenders basically take the discussed percentage of your every day sales. So you pay more when sales are high and less when they are slow.
There are several bad credit micro-business loan solutions; winning the best of them calls for thorough knowledge of the pros and cons of each.
Business Funding expert, Nathan Hale, founded First American Merchant with his eyes set on helping the backbone of our country, small business owners. His passions include writing/producing music, and travel. First American Merchant is America’s Best business cash advance bad credit Company, serving both traditional and high-risk Businesses