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Getting small business loans with bad credit is certainly not as easy as waltzing into a large bank with an established business and walking out with a deal, but even in today’s difficult times it is still a very real possibility that many entrepreneurs undergo.
Traditionally, the old method of getting a small business loan was to turn to your family and friends. While this old caricatured system has lost some significant popularity, the practice does, nevertheless, still exist for many start-up businesses who don’t want to deal with any bureaucratic hassle. In fact, it is much easier to do this today, due to the advent of P2P lending sites. Now while most of these sites cater to borrowers with fair-to-good credit (such as prosper.com and lendingclub.com), there are also other sites such as virginmoney.com which provide the necessary legal and business resources to conduct a loan with your friends or family in a professional manner.
The more common places to look are small banks and credit unions. Large banks will, of course, lock you up with a net of rules and regulations before you can get anywhere, but with small banks you have a better chance of being heard by an officer that will be able to cater to your needs in a more flexible manner. Credit unions offer the same opportunity, and without the additional cost of profit.
Because options for small business loans with bad credit tend to run small in terms of the amount that can be lent, you may not be able to get as large of a loan as you need. The trick to getting around this is to take out multiple small loans at the same time; as long as all credit pulls take place within a period of two weeks, there effect on your credit score will be no greater than if you had simply applied for one. This will allow you to borrow a large sum of money without having to apply for it all at once.
You may also want to consider SBA loans. The SBA (Small Business Administration) is a branch of the Department of Commerce that helps guarantee loans made to start-up, veteran and minority-run businesses. The SBA has a portfolio of 219,000 loans and, holding a net worth of 45 billions, is the country’s single largest backer of business loans. They offer a number of highly comprehensive programs that can help greatly with your needs.
