Having poor credit is an issue that affects a large number of businesses today. The worst thing is that many people don’t really understand how it works, not to mention there are those who have no idea what their score is.
However, having bad credit shouldn’t be a death sentence for your business. If you need financing, know that there are many options available to you even if your credit isn’t up to par. However, some options might be better for you, while others should only be used as a last recourse. Here are a few tips on how to get a business loan with poor credit.
Sit Down and Re-evaluate
The first thing you should do is take a long hard look at your business’s finances. What are your actual needs? What are your plans for the loan? How do you intend to pay it back? And, most importantly, is there a way that you can reach your goals without financing?
In most cases, the biggest concern of business owners who don’t have great credit is getting rejected for a loan. However, that doesn’t mean you shouldn’t meet with potential lenders. In the worst-case scenario, they might be able to direct you to resources and show you how you can make yourself more attractive to lenders.
If you absolutely need the funds, one of the things you could do is offer some collateral. Secured loans have the benefit of being simpler to apply for, and are great if you own a lot of valuable equipment that can be easily appraised. Before applying, however, make sure that you ask lenders what type of assets they accept, as well as the risks involved.
If you own property, borrowing against it could be another option. Services like ONYX finance, for instance, will accept retail premises, industrial units, warehouses, factories, and office blocks as security amongst other things. They will also sit down with you and give recommendations on which options would be better to achieve your business’s long-term goals. If you own enough equity in your property, you could be eligible for up to 5 million dollars in financing this way. If you want to learn more, visit onyxfinance.com.au.
Consider Merchant Cash Advance
If you process a lot of credit card transactions through a merchant account, you should also consider looking into merchant cash advances. This would be a great option if you only need a small sum of money to deal with emergency repairs or replacements, for instance. Merchant cash advances allow you to borrow a sum of money against your daily transactions. The lender will take a percentage of your transactions until you’ve paid off your debt completely.
As you can see, there is still hope if your business’s credit situation isn’t as good as you’d like it to be. Don’t hesitate to speak with a professional, and see what can be done to secure the financing that you need.