Bad credit is a huge red flag for traditional lenders. In their eyes, a bad credit score implies that you have not managed your finances wisely in the past. Ten years ago, having less-than-stellar credit would have made it completely impossible to secure business funding. Today, thanks to the ever-growing online lending industry, there are more options than ever before for bad credit business loans.
The Search for Business Funding
If you have bad credit and your searching for small business funding, you should know that getting financing from a bank will simply not be an option. While financial institutions are pushing to improve the accessibility of small business loans, the options are just not there for those struggling with their credit score. Even business with great credit are turned away. In fact, 4 out of 5 small business owners are denied funding.
Banks typically require a minimum credit score of 700, along with other strict criteria and financials. For this reason, online lenders like First American Merchant have stepped in to help these small business owners. Their cash solutions not only help entrepreneurs to grow their businesses, but also to rebuild their credit score overtime.
What are the Advantages of an Online Lender?
Working with an online lender with FAM involves much faster funding times than a bank. With a traditional lender, you could wait weeks – or even months – for approval only to be denied. Online lenders are also much easier to qualify for, their applications are known for being fast and simple, and they offer more types of business financing. The key is to do your research and choose the funding option that best suits your business’ future goals and current situation.
For example, First American Merchant’s merchant cash advance bad credit is its most popular cash solution. This funding option is not a loan; it is a sale. FAM purchases the merchant’s future credit card sales at a discount in exchange for a quick cash advance. The biggest advantage of this option is the easy collections process. Because repayment is a percentage of the business’ credit and debit cards sales, payments are both flexible and affordable. During busy periods, the business pays back more. During slow periods, the business pays back less.
Bad credit, time in business, lack of collateral and past bankruptcy are not a problem. The application can be completed in a matter of minutes, and funds are secured in as little as 24 hours. As a high-risk specialist, merchants that work with FAM also gain a support team with years of experience. If you need cash to cover daily costs, to purchase new equipment, to seize an opportunity or to boost cash-flow, consider what a merchant cash advance could do for you.