For an entrepreneur down on their luck, sometimes the only thing that is lacking is a second chance. But, in a credit-based economy a bad credit score can be worse than a face tattoo for putting a good foot forward. Finding sources of funding when a bad credit score stalks you like the business equivalent of the grim reaper can be frustrating. But, merchants with bad credit are not without options. Here are four ways of securing funding in spite of a bad credit score.
1) Business Cash Advance
A business cash advance works in spite of any bad credit you may already have. Basically, it is a purchase of your future sales by a third party called a business cash advance. Bad credit is not important as they aren’t giving a traditional loan, instead they are buying a portion of each future transaction until the debt is repaid. This is an easy and effective way of avoiding incredible interest rates caused by bad credit.
2) Loans from Friends and Family
‘F&F’ have funded more small businesses in the history of the world than perhaps any other source of funding. Asking for support from those in your closest circles is not a matter of credit. Investment from those who want you to succeed is more fulfilling than from a bank calculating interest rates. Asking for help from those invested in your success is always a positive choice.
3) Online Lenders
Banks and traditional financial institutions are always wary of bad credit and high risk merchant accounts. They have limited experience due to the necessary avoidance of any sort of legal action or fear of chargebacks. Online lenders are far more experienced and tolerant of the high risk world. If they’ve already proven they can succeed working with bad credit merchants, then you know that you can succeed with them.
4) Gifts and Grants
Programs do exist to help small businesses in certain industries and sectors. Finding them can be a pain, though. Local programs that support businesses are sometimes thinly veiled scam operations, but that shouldn’t deter a determined entrepreneur who fact-checks and is willing to do the research. Gifts and grants are a proven choice if you are willing to do your due diligence.
A bad credit score may seem like the end of the entrepreneurial road, but it doesn’t have to be. If a merchant needs a second chance at success, options do exist. Whether it’s from friends and family or a business cash advance with bad credit does not have to be the end of your story. A successful re-boot and you can begin repairing your credit score and put yourself on the road to success.