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Even in today’s rough-and-tumble credit market, there are still a number of ways for new entrepreneurs to get a bad credit business loan. Having bad credit is certainly never an asset in securing a loan, but where there is a solid business plan, there is a way to get funding for it.
You can discount the big banks entirely. Major corporate banks cater primarily to people and businesses in excellent credit standing, and see little reason to extend their credit to more risky propositions. Even if you come in with an excellent proposal for your business loan, chances are you will be ruled out by the rules and regulations of the banking structure, and the loan representative will have very little ability within his or her authority to do anything about it. Small banks and credit unions are much better options; they are much more flexible in their lending practices, and are more likely to treat you as a customer rather than a faceless account number.
P2P lending is another excellent and more popular method, thanks to the internet. The practice of lending money from wealthy individuals to the common person without the wastefulness of a middle man has become much easier. The two most popular sites for this practice are prosper.com and lendingclub.com. Here, you will be able to connect with individuals competing for your borrowing needs. However, credit is still a factor; prosper.com and lendingclub.com require credit scores of 660 and 640 respectively in order to qualify. However, there is the other option of borrowing from friends and family, which can be handled through virginmoney.com. Virginmoney.com allows you to make transactions with friends and family in a business-like manner, making it much easier to get a loan with bad credit. Business loans, credit card consolidation loans and home mortgages are all available through this website.
Another possibility is a merchant cash advance. Many merchants are willing to provide loans to businesses based on future credit card sales. Cash advances do not require credit scores to qualify, only a minimum level of monthly credit card sales. They are an excellent way to get a bad credit business loan if your business is managing to show good sales.