Bad credit merchants know the drill: You apply for a loan, and are turned down quickly. Sometimes it is your personal credit. Sometimes it is your business credit. Other times it is unproven credit issues that can cause you to be turned down. Bank loans are a terrible idea to even consider, but many merchants do not know of another funding option when they are in need of extra cash. The first – and only – thing that you need to do is contact your merchant account provider.
A business loan with bad credit is possible. However, the “business loan” that I am referring to isn’t a bank loan or payday loan, or even a loan from your uncle, but rather a buy-in on your future sales. This is called business funding. While it may still be considered a loan, it doesn’t behave like a loan. With a bank loan, you are charged a large interest fee that is tacked onto every payment. If you miss a payment, that interest fee can rise. Payment are due monthly, in large sums. To top it off, you have to sign over some form of collateral in case you default on your loan. So, if your business is failing and you cannot pay back your loan, the bank can take your car. This method is not a good idea for anyone – especially those with bad credit or an unstable business.
Instead, check out a business funding program from your merchant account provider. Those with merchant accounts can take advance of ACH funding, this sends money into your merchant account, and takes payments from that merchant account daily. Payments are only taken when you accept credit card payments, so if you have a few days of zero business, you are not repaying on something that you have not yet earned. Also, the application process is simple. Unlike a bank loan where you must have a pile of paperwork and references, your merchant account provider already has your financials, so little else is needed from you.
For those in need of extra business funding, a bank loan is not the answer. The best option is business funding from your merchant account provider. Contact them today to learn of your options.