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Tips for Finding a High-Risk Business Loan for Your Small Business

If you have been searching for small business loans, you have probably run across the term “high-risk business loans”. Confused? What is the difference between the two, and how do you know which one is right for your business?

Small business loans are very hard to secure. Applying for one with a traditional lender will likely involve extensive documentation requirements, collateral, financials, and long wait periods. For many, it is hours spent compiling information only to find out after waiting weeks (or even months) that they have been denied.

One of the biggest reasons a business is turned down by a bank is due to being categorized as “high-risk”. The lender labels a business loan as “high risk” because this type of loan is risky from their perspective; the loan is being extended to a less-qualified borrower. While there are many reasons for this categorization, some of the most common include: bad credit or no credit, limited time in business, high chargeback rates, high-risk industry, history of bankruptcy, tax liens, etc.

To determine whether you and your business are high-risk or not, the lender will likely consider your personal credit, how long your business has been up and running and your establishments annual revenue. With most lenders, a high-risk loan will be an expensive option because of the risk they are taking. Thankfully, there are alternative lenders that are more than willing to work with businesses considered high-risk, and provide affordable and flexible business funding options. For First American Merchant, low personal credit, little-to-no business history and low annual revenue are not a problem.

When is a High-Risk Business Loan Right for My Business?

When you are a high-risk borrower and traditional lenders refuse to work with you, a high-risk business loan is more than likely the right move. Most small businesses turn to this cash solution when it is their only option, and they need funds immediately. The following are just a few of the reasons business owners choose this option:

  • Quickly boost cash-flow
  • Take advantage of opportunities
  • Increase inventory
  • Hire new employees
  • Fund plans for growth
  • Purchase new equipment

First American Merchant is a high-risk specialist with years of experience in helping businesses secure the cash they need for growth. FAM’s most popular high-risk business funding option is a merchant cash advance. FAM advances the cash to your business, and then deducts automatic repayments from your business’ daily debit and credit card sales. The application can be completed in just a few minutes, and your business is given the cash it needs in as little as 24 hours.