When you’re trying to get funding for your small business with bad credit, it’s easy to get frustrated by the problems you face. Not only is bad credit a big obstacle, but trying to find a lender that will work with you can feel like an exercise in futility. You may have even been turned down before and think that your business is doomed because of your poor credit score.
However, there are actually plenty of small business loan options available for those who have less-than-perfect credit. In fact, according to The Balance Small Business, approximately 30% of small businesses have credit scores below 680—that’s nearly one out of every three businesses that may not qualify for traditional bank loans. So don’t fret! With some careful planning and research, you can get the money you need to fund your business and turn it into a success. Here’s how:
- Make a Plan for Your Business
Before you apply for any type of loan—even if it’s just to cover startup costs—you should develop a solid plan for your business. You should know exactly what kind of product or service you want to provide, how much funding it’s going to take to launch the business, whether or not the market has room for уоu, and how you intend to turn уоur business idea into something profitable.
When you have a plan in place, you will have a better idea of how much funding you need and whether or not you can feasibly make enough money in a short amount of time to pay back the loan you take. It will also help you determine the type of loan you need and whether or not it will be worth it. If you’re not sure what type of loan you should apply for, read this post on the types of loans you should consider.
By planning your business, you’ll have a better idea of what to expect and how to prepare for it. You’ll also be better equipped to talk about your business plans when you meet with a lender for the first time. In the end, your business will bе in a better place to get funding for the business.
- Gather Evidence of Your Ability to Repay the Loan
The first thing the majority of potential lenders will want to see is proof that you can repay the loan. So you need to do your research before you apply and make sure that you can provide the lender with the necessary documentation.
The lender will want to see that you have enough income to pay back the loan and that you have a stable job. If you already have a business that’s bringing in money, that’s a big plus! If your income is inconsistent, doesn’t exceed a certain amount, or you’re self-employed, you may need to seek out alternative financing or a different type of loan.
- Look for Alternative Funding Sources
If you don’t have enough income or assets available to secure a loan, you have other options. First, you might consider using a bank to borrow money for a business loan for your business. There are some banks that specialize in lending money to small businesses, so you can search for one in your area and see if they offer loans with less-than-perfect credit.
Second, you can look into alternative lending sources. For example, Alternative Funding Group is a popular option for borrowers who need small business loans with bad credit. In AFG, you connect with us and make a request for the amount you need. Then, we will decide whether to accept or reject the request. If we accept it, the amount of time it will take for you to get the money could be as fast as within 24 hours.
In AFG, we do not really need to look at your credit score. Instead, we accept your application based on the assets you have available to cover the loan, the probability you’ll pay it back, and your business plan. In the end, AFG can be a great option to consider when you need a small business loan with bad credit because it doesn’t rely on a traditional credit score.
- Work With a Business Consultant
Lastly, you might consider working with a business consultant to look over your business plan and help you find ways to improve it and make it more convincing. A business consultant can also help you find ways to finance your business that you might not have found on уоur own. So if you really want to get your business up and running and fund it successfully, this can be a valuable option to consider.
Overall, the key to getting a small business loan with bad credit is to be prepared. You need to have a solid business plan in place, so the lender can see how your business will make money and turn a profit. If you already have a business, show them how you plan to grow it and expand. And if you’re looking for a loan to start your business, show the lender your plan for growth, how you will make money, and what your plans are for the future.
Your Best Bet
Alternative Funding Group is an alternative lender that provides small business loans with bad credit. We have helped thousands of borrowers, who have been turned down by traditional banks, get the funding they need to start up or expand their businesses. Work with Alternative Funding Group to get the money you need to get your business off the ground.
If you need to borrow money, don’t hesitate to apply with us. Yоu can count on us to help you pursue your business dreams, no matter what your financial situation is. Just fill out our online application, and we’ll be in touch within 24 hours.