A lot of people looking to start businesses, or expand their businesses, believe they can’t get the financing they need because of their bad  business credit history. Don’t let this stand in your way! With the help of business loan providers, you can turn that frown upside down and make starting your business—or expanding your existing one—a reality! But before we get into where you can get a business loan with bad credit, it’s important to discuss how poor credit history can affect traditional loans.

Small Business Loans with Bad Credit

If you’re in search of an option that could provide funding for your small business, but have bad credit, don’t lose hope. It might not be easy, but we can help steer you toward options that won’t involve turning down your application because of a low FICO score. There are plenty of ways to get access to fast cash if you need it—you just have to know where and how to look. First, understand why lenders hesitate when they see poor scores on business loan applications. For starters, it doesn’t take much to end up with bad credit. A single late payment or maxed-out card can do damage to your FICO score over time. That means even if you make all payments on time now, something as simple as a lost job or broken bone can wreak havoc on your future ability to secure financing from traditional sources like banks and credit unions. Because of these risks, businesses offering loans will typically require higher interest rates than those available through mainstream lenders like banks and credit unions. The good news is there are other options out there for getting access to capital without having to sacrifice too much in terms of the overall cost—it’s just a matter of knowing where to look.

Getting Approved for a Small Business Loan When You Have Bad Credit

It may seem like bad credit will put you out of luck when it comes to getting a business loan, but that’s not necessarily true. It can be challenging, yes, but there are still options available for small business loans for bad credit seekers. In fact, some of them might come as quite a surprise. For example, consider these: You can try a traditional bank or credit union, but your best bet is likely an online lender (these often have more flexible requirements). Look into SBA financing (the Small Business Administration offers guaranteed loans up to $5 million). Consider friends and family—if they believe in your idea enough to invest in it, they should also believe in your ability to pay them back. Consider equity funding—selling off partial ownership of your company provides capital while also helping secure investors who share in your vision and work ethic. 

Finding the Right Financing Option For Your Budget And Needs

Before you begin your search for financing, it’s best to have a good grasp on what you need and how much money you can afford to spend. After all, bad credit or not, there are always strings attached—even when it comes to small business loans. For example, if you’re looking for a personal loan from an established banking institution or another traditional lender, you’ll likely be required to have some collateral in order for them to provide funding.  However, if you don’t own any property, securing a loan through one of these institutions might prove difficult. On top of that, many lenders will only issue loans up to a certain amount based on your income level. If you make too much money they won’t lend enough; if you make too little they won’t lend at all. So before shopping around for financing options, take time to do some research and determine which type of lending program is right for your business’s needs and budget.

The Factors That Affect The Ability To Get A Small Business Loan

First and foremost, you’ll need to have a business plan in place. While some lenders might give you credit for having nothing more than an idea or concept in your head, anyone worth working with will want something concrete. The second thing that matters is how much collateral you have available. You should also be prepared to show how your business will make money or operate profitably—including income statements if applicable—and meet any other conditions that are necessary for approval. Finally, if your poor credit history is hurting your chances of getting financed, don’t despair; there are still ways around it! For example, there are special lines of business-specific loans designed just for people like you—just look into them!

Taking Advantage Of All The Ways To Get A Small Business Loan With Bad Credit

Today, a business loan is not only an avenue that provides you access to much-needed capital, but it’s also likely one of your best chances at building up or repairing your credit. Why? Because many small business loans can be used as collateral for even larger financing later on down the road. For example, if you want to build up your credit score before applying for a mortgage, look into getting approved for an SBA loan. It’s one of few types of financing that can help boost your credit and set you up for future financial success. In addition, don’t be afraid to apply for business loans from multiple sources.

How United Funding Group Can Help

United Funding Group can be there for you if your credit score is less than ideal. But what makes us stand out from other small business lenders is our wide range of flexible funding options and competitive rates. We also offer a variety of loan programs, including SBA loans, equipment financing, and more, so it’s easy to find an option that meets your needs and budget. UFG was founded with one goal in mind: helping you grow your business. We do that by providing financing for different types of businesses; we specialize in commercial lending but also help credit unions fund startups. So if you have poor credit history, we invite you to learn more about all that UFG has to offer here.

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