Bad credit is a major deterrent for most lenders. According to a Biz2Credit report, only 23% of business loans are actually approved from big banks, and a poor credit score is one of the leading causes for loan application rejection. If your credit score is bad (a score that FICO classifies as 300 to 629), you will need to consider finding an alternative lender for financing. Below are some of your best options, depending on credit score, to find the funding necessary to start your business.
Credit Score Under 500
First American Merchant Advance (FAM) is popular lender that provides business funding with bad credit through a variety of programs. One such program is the merchant cash advance program, which functions differently from a traditional business loan. The lender purchases a percentage of future sales from the merchant at a discount. Both the lender and the merchant agree to the amount of sales that will be purchased and for what cost. This way the lender is paid in good times and in lean times.
For many, this arrangement is preferable because there are no monthly payments to worry about. As a result, the risk of loan default is drastically reduced. Plus applications are processed within 72 hours and applicants don’t need to provide tax returns or other financial documents.
Credit Score 500 or Higher
BlueVine is a good option for new businesses searching for moderate loans. BlueVine provides advances based on the profitability of your invoices. Approval is determined by cash flow and not personal credit. Still, all applicants must have a 530 credit score, $120,000 in annual revenue, and at least three months in business to qualify.
Credit Score 600 of Higher
StreetShares is a viable option for businesses with moderate credit and good cash flow. Applicants need only be in business for one year and have $25,000 in annual revenue, or $100,000 in revenue and 6 months in operation.
Don’t let bad credit stop you from pursuing your dreams. FAM provides business funding with bad credit through flexible programs to get you access to business saving cash in less than 72 hours. Merchants will not have to submit any financials or tax returns to qualify. Get the funding your business desperately needs. Contact us now to start your application.