Contrary to popular belief, banks do consider and lend to business loan candidates with less than perfect credit. However, as one might expect, the candidate must take additional steps to prove that their business plan will succeed. Being a business owner is very challenging and requires careful financial planning and oversight. Even the businesses with the best financial oversight can be blindsided by an industry pitfall that could severely cripple, or even bankrupt, the business.
If you are a business owner that has found that your business is in a financial bind and you are not ready to close up shop or sell it to the highest bidder, then you have likely considered the options available to keep the doors open. The most obvious, but perhaps the most daunting, way to pull your business out of a financial bind is to secure a business loan. Many business owners find that securing a business loan sounds as simple as orbiting the moon, but there are lenders that will consider even the most unlikely of loan candidates, including those with bad credit.
What you need to know about business loans for people with bad credit
The first thing that you need to know is that loans for business owners with bad credit really do exist. The next thing that you need to know is that you, as the business owner, will be expected to prove that your business is worthy of obtaining a loan. Banks and other lending institutions certainly do not want to loan money to just anyone that says that they need it; lenders want to know that the borrower is ready and willing to take the steps necessary to pay the loan back.
One may wonder why a lender would consider loaning money to a business owner that not only has less than perfect credit, but also has found his or her business in a financial position where outside capital is the only way to continue. The answer is simple: such institutions prefer to judge the credibility of a business by its merit over the years instead of by the credit scores of the business obtained over the years. They believe that the success of any given business, in the long run, is not so much determined by its credit scores but by the history of their data on sales.
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Who are the lenders and what are they looking for?
Lenders are looking for a sound business plan and evidence that the business can and will be successful with the use of the loan money. Establishing a business plan that meets a lender’s criteria is a bit tricky and may require the help of a company that specializes in presenting and securing loans for business owners. These companies have business funding solutions, tips and techniques, and offer sound guidance for business owners that are unfamiliar with obtaining a loan.
In addition to establishing or outlining your business plan to meet a lender’s criteria, these companies have relationships with lenders that specialize in loans to business owners with bad credit. In order to identify the lending institutions that really will consider loaning to business owners with bad credit you may find yourself making a lot of phone calls and filling out paperwork that may end up in the circular file, but if you have the time to dedicate to this necessary step, then it might be worth the time and effort.
However, if you are short on time and want to streamline your efforts, you should consider a business funding company that has tested and proven approaches to securing loans for business owners, especially those with bad credit who may need a little more finesse put into the application process. If you’re in need of a business plan or business loan and you have less than perfect credit history, you may want to contact us for more information.
