This is a very popular question we are often asked. Are there government small business loans for bad credit? It all depends on who you ask and what state you’re in.
The most popular form of government backed loans, like SBA loans, have credit requirements that require a strong personal credit profile, in addition to requiring strong financials for the business. It can be difficult to get a government small business loan with bad credit, via the SBA route.
There are other alternatives though:
For example, you could get invoice factoring, through a private lender, like Delancey Street, in order to get financing for your small business. Even if you have bad credit, this is a great type of business financing. With invoice factoring, what we look at is the quality of your business, and your receivables. With invoice factoring, our company is purchasing your invoice and it’s our job to collect the funds from it. Invoice factoring doesn’t require you to have good credit What’s important is that the business who we’re collecting funds from has good credit. As a result, the burden shifts to your client to have good credit.
Another great alternative is merchant cash advances. This is a great alternative to getting a a government small business loan with bad credit. With a merchant cash advance, even if you have bad credit it’s ok. Merchant cash advances are based on your business, and how strong your business is. If you’ve got good income, recurring, then it’s possible to get a merchant cash advance. Typically, merchant cash advance lenders will look at the last 3-6 months of your bank statements. They’ll look at how long you’ve been in business, and how strong your business’ financial history is. Even if you can’t qualify for a government business loan due to bad credit, it’s still possible to get private financing through a merchant cash advance.
How to prepare your business for a business loan with bad credit
Building a business from the ground up is quite an accomplishment, so you should pat yourself on the back for your hard work! Sometimes, having access to working capital makes the business go a lot smoother.
Regardless of whether you need to stabilize your cash flow, your business needs new inventory, or you want to expand to a second location, you can make moves when you have the funds you need to make it happen. A small business loan could be exactly the thing your company needs to grow and thrive.
Having access to working capital is one of the most important things a small business owner can have to grow their business. Working capital can help to alleviate the numerous challenges a small business owner may face.
At Delancey Street, we can help small business owners get up to $10 million in working capital that they need for their business. We provide all types of business with small business loans, hard money loans, merchant cash advances, invoice factoring, lines of credit, and more. We take the time to understand the unique needs of each business owner to help them get the right loan for their situation.
At Delancey Street, we have a fast approval process, and funding can take as little as two business days. You can use the funds in any way you want such as making payroll, buying new equipment, paying vendors, or increasing wholesale inventory. Our flexible repayment plans are tailored to accommodate the cash flow structure of your business. We even work with clients with bad credit, so there is no excuse. Apply with us today. Getting a business loan can be an important moment in the life of your business, but the process of getting a loan is not easy. There are many steps you will have to take before a loan offer is made. If you are properly prepared, you can remove some of the difficult obstacles in the process.
Preparing for the Loan Process
If you are a business owner who needs working capital, you should first understand what you need, why you need it, and how much you need. For instance, you may think you need a loan when in fact invoice factoring may be a better option. You may think you need a $10 million loan, but can you make the monthly payments? Would a $1 million loan be enough to get what you need to meet your business goals? Once you have thought through these and other questions, then you can begin the process of understanding your creditworthiness and start collecting documents for your loan application.
Your Credit Report
One of the first documents any lender will look at is your credit report. A credit report helps lenders decide if they are going to lend you money, how much money they want to lend to you, or if there are other financing options available to you. Lending decisions are not completely based on your credit report, but it gives lenders an idea of how safe it is to place their money into your hands. In other words, the chance of you being approved for a loan with great terms improves if you have great credit.
Before you apply for a loan, get a free copy of your credit report. Check to see if there are any derogatory marks on your credit report such as late payments, collection accounts, or tax liens. If you have any of these derogatory marks and you feel they are a mistake, then you can have these mistakes corrected, which will improve your credit score. Your credit score will also improve when you pay down any of your existing debt.