Today, having bad credit is normal. In fact, it’s been a little over 10 years since the Great Recession. What is bad credit? Defined by FICO as a score of 300 to 500, is usually considered bad credit. However, the FICO is just a score. More important is what’s reporting on your credit report. All in all, bad credit is the most common reason why a business loan application is rejected. The good news is that bad credit business financing exist. That’s correct. Entrepreneurs with bad credit can still obtain business financing.
+ Bad credit business financing options
How do you get a business funding when you have bad credit?
Today, there is an array of alternative lenders. These, financing providers will help you get the funds you need. First, most of these lenders require a minimum personal credit score ranging from 500 to 580. More interesting, is that some lenders don’t even have a credit requirement. In this day and age, other factors are taken into consideration.
What do alternative lenders look for when credit is bad?
- Annual revenues
- Daily close out balances
- Accounts receivables
- Hard assets such as equipment
- Business cash flow management
Other factors that may be considered include time in business, your industry, location, internet presence and more. Indeed, lenders have changed the way the view a borrower. Long gone, are the days when a a credit score was the determining factor.
To finalize, there are options for you when you have bad credit. The cost of capital may be higher. In the end, you can obtain the capital you need.
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