A recent report showed that 63 percent of businesses seeking a loan chose a traditional lender, like a bank, to seek funding. However, only 23 percent of these businesses were successful in acquiring the loans. Even though the economy is in recovery, banks are still extremely conservative when choosing which businesses to lend to. This means that companies with bad credit have little to no chance of acquiring loans from traditional sources. Banks and payment processors will reject your merchant account or charge your business excessive fees for operating. Even if the BBB gives your business an A rating it can still be denied a loan.
The latest recession placed a large number of small businesses under the burden of bad credit. The truth is it is harder for a small business with great credit to obtain significant loans than it is for a large business. The biggest obstacle for most business owners is access to capital to fund their ventures. Business loans give small companies an opportunity to hire employees, buy essential inventory, upgrade systems, and increase marketing efforts.
Still, there are a few ways that businesses with bad credit can get loans.
Credit Partner – Sometimes businesses can use a credit partner with a strong credit score to give them access to lines of credit in the form of business credit cards.
Revenue-based loans – Companies can get a loan equal to 10 percent of their annual gross deposits, and it only takes 7 days to get funded.
Payment Processor – Now reliable online payment processors like First American Merchant Funding (FAM) can get bad credit merchant accounts instant approval for loans. AFM has helped thousands of businesses with bad credit open profitable merchant accounts despite any former tax liens, bankruptcies, or FICO scores.
If your business has bad credit then you need simple, straightforward, and quick services from a lender who specializes in improving businesses with bad credit. Contact FAM for alternative business financing and working capital.