If your business has a less than perfect credit rating, does that mean you should be denied the opportunity to grow? Of course not. Loans for small businesses with poor credit are out there
You may have tried shopping around for a conventional business loan with traditional lenders. If you’ve spoken with high street banks, you’ll know that their criteria are fairly tight. So if you do have any bad credit history, this will undoubtedly hinder the process further as they feel that lending could be too much of a risk.
Alternative business funding can help when you have a mark on your credit history, such as a county court judgement or historical late payment.
No two businesses have travelled the same path. Every venture, small and large, has faced its own unique challenges on its way to growth, with some fairing better than others.
Inevitably, some businesses must navigate a rockier path to get to where they want to be. Cash flow problems, staffing issues, supplier disputes, whatever it may be. It could lead to your company being stuck with a less than ideal credit status.
How can I get a business loan with bad credit?
This should not stand in the way of genuine growth, and thankfully there are loans for poor credit in the alternative lending market that can assist companies who have found themselves on a slightly trickier path to grow.
One great option is a merchant cash advance. This is a good option for small businesses who may have bad credit but can demonstrate a consistent level of recent income via card sales.
Rather than focusing on how your previous financial agreements were serviced, a lender will provide you with the cash you require by simply assessing your card sales over the last few months. If you can demonstrate that your business makes a consistent level of card sales over a certain period of time, they can be provided with the funds you require in exchange for a percentage of future card sales.
What type of finance is available for my business?
We have compiled a PDF guide to help your business find the right type of finance – especially for businesses with bad or poor credit status. It also serves as a tool to help you and your business to get the funding you need to grow and prosper.
What should I tell the lender if I do have poor credit?
Be upfront. Although having a poor credit score on your record doesn’t really impact your qualification for a cash advance loan, it is good practice to be upfront and honest. In fact, it will probably help the relationship in the long run.
You see, many lenders will have a set amount of pre-qualification criteria that a customer needs to meet. A series of check boxes almost. It’s this underwriting criteria that can sometimes slow an application down. A commercial business loan is an agreement of trust too.
After all the paperwork and relevant disclosure, it’s about an honest commercial relationship. This type of relationship can work for a business for many years to come building up trust from both parties where the eventual outcome is positive for your business growth.
My business is in financial difficulty
If you have approached commercial finance providers such as high street banks, you may have faced tight underwriting criteria that has ultimately stopped you in your tracks. If you are facing financial difficulty in obtaining a business loan because of your credit scoring, it could be a good option to talk to our team.
We have helped many businesses who are in financial difficulty. It could be a cash flow issue or tax demand. We understand the daily issues businesses face. The UK Government supports these loans for small businesses through the British Business Bank Investments. It offers a finance solution to companies when other lenders have failed to help. By the very nature of this non-bank funding product, it doesn’t often take credit history into account.
Whichever path you have taken to get to where you are today, there are company loans available to help you continue to grow and prosper. If you’re concerned about your credit history but still have a clear direction and plan for your business, we can have a specialist bad credit business loans team who can help.