Bad credit is a major stumbling block for small businesses. A recent report by Biz2Credit, reveals that only 23% of business loans are actually approved by traditional lenders, and poor credit scores are the leading cause for loan rejections. If your credit score is poor, your business may need to find an alternative lender for financing. The following are few of the top options to finding the necessary funds to start your business.
Kiva Zip: this is an American crowdfunding nonprofit microlender. Kiva Zip uses “social underwriting” instead of traditional underwriting. Social underwriting relies on peer pressure to motivate borrowers to repay loans, instead of bank pressure. In addition, Kiva Zip does not take into account credit score or charge interest.
Accion: if a business is struggling to repay a loan, it might be wise to refinance to get better rates with a longer repayment term. Accion requires that all applicants have a credit score between 500 and 575. However, Accion’s loan offerings vary from state to state. Check to see what offerings are available in your state.
Cash Flow Issues
Kabbage: offers merchants a line of credit, a good option for businesses that need occasional infusions of cash for daily expenses. To qualify for a good line of credit, a merchant will need at least 12 months in operation and a minimum of $50,000 in annual revenue. Kabbage will check your credit score, but has no minimum credit score requirement.
For Struggling Businesses
First American Merchant Advance (FAM) provides business funding to high risk lenders regardless of credit. The company provides a variety of programs to suit any merchant’s needs. One popular program is the merchant cash advance program where FAM purchases a percentage of merchant future sales at a discounted rate. FAM and the merchant agree on the amount of sales to be purchased and for what cost. This arrangement decreases the risk for default for merchants.
Don’t let bad credit or inexperience stop you from pursuing your dreams. FAM provides no credit check financing along with flexible programs designed to deliver financing within 72 hours. You won’t have to submit any financials or tax returns to qualify. Get the funding your business needs today.