It is true that a number dictates whether or not you can receive funding for your business. Your credit score, good or bad, determines your eligibility for financing. High scores mean finding funding sources will not only be easier, but you will also have a variety to choose from. However, if your score is low the variety narrows significantly – options can even become nonexistent.
Unfortunately, you can’t treat your credit score like an etch-a-sketch and simply swipe and start over. You are stuck with it. It is possible, however, to fund you’re your business in ways that will actually build your score and get it back on track. Then, when you’re ready to boost your business to the next level, your score will allow you to do so.
Consider the following methods of obtaining funding:
Look for new sources of funding. Chances are if you are have bad credit, traditional funding sources are not going to be willing to help you. Because you have bad credit, you will be categorized as “high risk”. Studies have revealed that credit card and bank financing account for only 25 percent of the total funding needs of startup businesses; this should provide some relief since 75 percent of your funding can come from a source that relies less on your credit rating.
Seek loans opportunities closer to home. Family and friends are usually our biggest supporters since they genuinely want us to succeed and make our dreams reality. In addition, who doesn’t like the idea of making their own way in the world and becoming an entrepreneur? Typically, family and friends are not too concerned with your credit score being poor because they know you intimately and trust you. Unfortunately, banks no longer evaluate your business concept and character the way your family does. A private loan from relatives, friends or a business associate(s) may be the answer to your funding needs.
Take your search online. The number of funding options for businesses on the internet continues to increase. There are now many providers willing to offer funding and their services to businesses that are otherwise considered “high risk” and/or “undesirable”.
Have you considered the options that a merchant cash advance can offer your business? A merchant cash advance is not a loan; it a sales transaction. The provider agrees to offer you funding and, in return, they purchase your future credit card sales at a discount. Merchant cash advances do not have strict credit requirements and no collateral is on the line.
For example, 1st American Merchant Funding offers merchant cash advances to business owners regardless of their credit score or their categorization of being high risk. The application process is as simple as submitting a form, receiving a quote and getting your funding. You can obtain a bad credit merchant account and get instant approval.
Don’t let bad credit prevent you from reaching your business goals. Take advantage of the growing alternative options that are out there. Even when traditional sources are not willing to offer you their services, you can still grow your business.