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Low Credit Scores Don’t Mean You Can’t Get a Small Business Loan

Small Business LoanAre you one of the thousands who suffered a foreclosure during the recession? Were you forced into bankruptcy protection? Or were you one of the millions who stuck it out robbing Peter to pay Paul with late payments up and down your credit report? Do you now find yourself in a position where you need immediate cash for your company and want a small business loan? With your credit rating, who will have you?

First you need to understand your credit report. If you currently have late payments, yes your credit rating will be affected. However, if you brought them current over a year ago the late payments will not be as negative as they once were. However, if you went bankrupt or had a foreclosure, these can remain on your credit report for as long as 10 years. If you have an unpaid judgment or tax lien, this can remain until they are paid.

That is all of the bad news. The good news is that if you need an infusion of money into your company there is an option other than a small business loan. It is called a merchant cash advance and it is reserved for those who accept credit and debit cards for purchases. It does not matter whether you have a brick and mortar store or an e-Commerce business. A merchant cash advance is based on the strength of your sales and not on your credit score like a small business loan.

Lenders who facilitate merchant cash advances look way beyond a simple credit score. What can that number tell them about the viability of your company today, tomorrow and in the future?

A merchant advance operates totally different from a fixed payment loan. The business owner is borrowing against his future sales. For the sake of simplicity, say he needs $10,000. His best months are October through December and April through July. With a small business loan this merchant may have a payment that is easy to handle during the prime months. But he would not be able to handle that amount during the lean months.

With a merchant advance the payment is based on a percentage of sales each month. For our example, we will use 5%. This merchant sells $8,000 in goods in November. Therefore his payment will be $400. However, in February he only sells $3,000. His payment would be $150.

This is a huge advantage. When applying for a merchant cash advance rather than a small business loan the business owner does not need to submit tax returns or financials and credit scores under 500 are accepted. Approval could be within 72 hours. Because a merchant cash advance approval is based on business performance rather than personal credit, time in business or financials there is an exceptionally high approval rate.

If you need working capital and cannot get approved for a small business loan, do not hesitate to call us at 1-888-785-6811 or contact us below.