What Contributes to Bad Credit?
While many factors contribute to the definition of ‘bad credit’, the most important factor comes from your financial past.
- Has your business previously had difficulties paying back loans?
- Do you have a large outstanding balance on your credit cards?
- Do you pay your bills on time?
To avoid further damaging of your business credit, business owners must make it a priority to ensure that all answers to the above questions are ‘Yes.’ Obviously, when debt is paid consistently and sufficiently your credit score rises and your creditworthiness improves.
But what happens if the past is hindering your capability to secure a loan?
If you’re looking for a loan but have bad credit, do not let that deter you. There are many options that business owners of all shapes and sizes can take advantage of.
How to Secure a Loan With Bad Credit
For many, credit can be a confusing concept. And can be even more overwhelming if your business has been classified as having bad credit.
But, even if this is the case and securing a loan seems hopeless, it is not! There are a variety of options for business owners of all credit levels.
Which leads us to the million-dollar question...
If You Have Bad Credit, What Are Your Options?
Securing the best loan option even with bad credit means finding a lender who is upfront about rates and fees, flexible on terms, and looks past your credit score number.
With that being said, some options include:
- Merchant Capital Loan
With merchant capital, lenders offer an immediate lump sum to the borrower in need. In order for the lender to collect repayment from the borrower, they take money from the business’s future credit card sales.
- Accounts Receivable Financing
Accounts receivable financing uses the business's invoices as collateral (as opposed to a sale of those same receivables). This provides the business with access to a fixed line-of-credit.
- Working Capital Loans
Working capital loans have the sole purpose of financing the everyday operations of a business. Besides your credit score, there are other factors lenders place a bigger focus on. These include annual revenue, monthly deposits, and average daily balances.
Why Choose CMS Funding for Working Capital Loans?
In order to secure a business loan with bad credit, you must conduct research on all potential lenders. CMS Funding analyzes a business's performance and grants the business a sum of money based on both annual and moneth-to-month revenues.
Are You Afraid to Seek Financing Because You Think Bad Credit Will Hold You Back?
CMS Funding offers some of the lowest rates while requiring zero collateral. Additionally, we offer terms from 6 to 24 months and have an approval rating of 85%!