Financing small businesses with bad credit is a task taken on by alternative lenders throughout the country. Traditional banks have turned away from most types of business loans in general due to strict regulatory requirements. While the federal government claims they are urging banks to lend to businesses, banks are looking away as they are too gun shy and would rather sit on the cash.
Who Handles Financing Small Businesses With Bad Credit?
Alternative lenders, like Small Business Funding, can help provide the capital needed to help support financing businesses with bad credit. Often traditional lenders like banks will not even look at providing capital to any business below a certain FICO threshold. Each bank has their own threshold but usually anything under 725 is suspect. Financing small businesses with bad credit requires out of the box underwriting. Alternative lenders each have proprietary algorithms that they use to determine whether or not they will approve financing small businesses with bad credit. One’s credit score is used not to determine approval or decline rather it plays a role in how much and for how long a lender will advance money. Small business Funding puts more weight on the overall business performance, time in business, cash flow, and needs of the business itself when determining how much capital a small business owner with bad credit can receive. Often times the reasons for bad credit are unrelated to the business itself. A divorce, a partnership breakup, a natural disaster causing business disruption and loss of revenue, etc… These should not be used against a business and ultimately cause loss of the ability to receive capital when needed.
Financing Small Businesses With Bad Credit and What They Use The Capital For
Your business can use the capital we can get for you for any reason but usually businesses use it for a specific purpose. These being for expansion of an existing site, securing an additional location, new hires, to make payroll, to finance equipment, for maintenance and upgrades, for special inventory purchases, or for a bridge loan until a receivable comes in. Taking out an alternative loan like this should always have a purpose as the cost of credit is more expensive than a traditional loan. Again, this is considered high risk money and therefore carries a larger cost relative to a bank loan. If you can go to a bank and wait for money then that is your best choice but if your credit is poor we are your outlet for capital. Small Business Funding is the one stop location to connect you to all the alternative lenders in the country. For financing small businesses with bad credit please click here or call us direct at 1-800-742-2995.