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Funding Options for Bad Credit Merchants

No one wants bad credit, but it can happen to the best people. An unpaid medical bill, a late mortgage payment, or even a fraudulent charge can quickly tank your credit rating. For a consumer this is tough, but for a merchant the outcome is even greater. Many things are based on a merchant’s credit, from renting a building, to state licensing, to interest rates. The latter makes it risky for a bad credit merchant to obtain a business loan – which may be a blessing in disguise.

A business loan is okay for those with high cash flow and good credit. For those with bad credit and an unsteady cash flow, this is a terrible idea. A business loan requires payments that are due almost immediately – and in large amounts – which is hard for many to do. Business loans also have high interest rates, especially for merchants with bad credit. For most, a business loan is not the way to go.

Another option is new, and for some risky. Crowdfunding sites are gaining speed, but they are not the best choice for all merchants. These sites let you choose the amount you want to raise, state why you want or need to raise the funds, and let you share the campaign on social media. This can get you funding from customers and strangers, but for some there is a catch. Certain crowdfunding sites require that the merchant give something to the donor if the donation hits a certain amount. For instance, if you operate a screen printing shop you could give each $100 a t-shirt. This can quickly add up in cost, especially if your funds are already tight. So, crowdfunding is scratched off the list for many merchants.

This leaves the best choice for bad credit merchants: a cash advance. You can get a cash advance with bad credit, and the process is fairly simple if you meet the criteria set out by your merchant account processor. The repayment process is easy since it comes directly from your merchant account at the end of each business day. There are no checks to worry about, and no massive payments once a month. Bad credit merchants, this is your solution for funding.