Ah credit, that pesky number that we don’t pay any attention to until we need funding for something. In this case, it’s funding or capital for your small to large business. And yep, your credit does get looked at and yes, if it’s bad credit your options are a bit different.
But here’s the good news- if you have bad credit and you need small business loans, you still have some great options. Whether you need business funding for equipment purchases or to keep up with the demand of your customers, we’ve got picked the best option you have for business loans with bad credit, and want to tell you what to expect.
Know the Term-Bank Statement Business Lending
This kind of business loan is for business owners that have low or poor credit but do have an established business. Typically, these lenders require that you have at least three months of statements that show a positive balance. Those three months show the lenders that though your credit is likely poor, your business is doing well, and there’s revenue that they can see. Then they pick the amount you can afford to pay back off that and automatically have it taken out of the bank account every month.
Some perks of this type of business loan for bad credit are:
- With on-time payments, it helps build your credit
- It comes in cash, deposited into your businesses bank account
- You can pay it off early with no fees
- You can be approved within a day or two which is pretty fast!
Some things to keep in mind when applying for this type of fast business loan are:
- Every month the payments are taken out automatically. So plan your budget accordingly.
- Always have an advocate for you and your business loan in case you are confused or need to change the monthly payments.
Don’t Worry About a Pull on Your Credit
Lenders know that with every credit pull, there’s a negative mark on your credit. That’s why we, and many other lenders, start with only a soft credit pull. A soft credit pull doesn’t show up on your credit and cannot negatively affect it. Because we, and lenders like us, look at the health of the business as a standard of what you can afford to pay back- credit checks can be avoided.
Credit Scores Defined for Business Loans
All this talk about credit likely has you wondering, what exactly constitutes as bad credit, or good credit? While the answer varies depending on the lender, there are some ranges that business capital lenders do all agree.
So let’s look at this so you can see where are at for business funding.
Credit Score 700 or Higher
With this score, you meet the minimum credit requirement for all business funding. This goes for the most challenging ones to get, like the SBA loans or actual in-house bank loans. However, they can take weeks to get you approved, and often require a business plan and many meetings.
Though our loans are ideal for people with bad credit, we are even better if you have a high credit score. With the right business bank statements and a high credit score, we can get millions approved, in cash, and fast. Apply today to get started.
Credit Score 650-700
You’re still doing pretty good on this range. If your business is doing well and growing, you could still get an SBA loan, and some banks might even approve you. It’s going to be hit or miss which banks do approve you, and it will take some time, but you’re looking good if that’s the route you want to make.
Credit Score 620-650
This is where your business loan options are a bit more limited. Our advice to you is to avoid traditional lending like that SBA or banks loan because they do a hard pull on your credit, which will lower the score. If they decline the loan, you then have to go to another bank with a now lower score. Keep working hard and after a few months of that business doing well we, or lenders like us, can get you the loans you need.
Credit Score 550 or Lower
You a very limited at this point. Your only options are to have good looking business bank statements so you can apply for that business loan for bad credit. We will look only at the condition of your business, not your credit score. The more months you have had the company running and doing well, the better your chances are. Typically, we need to see three months at the least, of bank statements. So there’s some excellent news if you have good credit or the worst of the worst credit, and yet you still need business loans.
If you’re looking for something fast, reliable, trustworthy, and flexible- the business loans for bad credit to use are bank statement business loans.
So, Where Do You Find These Kinds of Loans?
Bank statement business loans are typically a bit harder to find. Usually what happens is you find a business loan broker. This broker has built relationships with the lenders and acts as an advocate for you and your business. They do all the heavy lifting, the talking to lenders, negotiating, and help you navigate those waters.
How the broker makes money merely is by sharing the commission of the loan with the lender. On the flip side, if they ever approve someone and that client doesn’t pay, the lender takes the broker’s commission away. This helps brokers only to approve you if you can pay the loan back and makes sure you are only approved for what you can afford.
Working with direct lenders is also always an option if you know where to look. If you do decide to work directly with a lender make sure you don’t take a loan approval for more than you can afford, and make sure you read all the fine print.
Final Business Loan for Bad Credit Tip
No matter where you get your business loans, make sure to use it to grow and scale that business so you can pay that loan off. That will help your credit score all around, and also improve the financial health of your business. If you’re looking for a business loan and have high or poor credit, Cash Business Capital can find the right loan for you, and in just a few short days.
Contact us today, and we’ll get you headed in the right direction.