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Financing your business with bad credit is no easy task. Many entrepreneurs find themselves in a sticky situation when they need money to expand their business (having easily acquired a start-up loan), but cannot acquire funds due to their bad credit. Business financing is difficult with scores that are under 650, as they are considered risky to most lenders. Entrepreneurs looking to get business loans with bad credit, especially in the modern economy, are going to have to look in some unconventional places.
One of the best options is a business cash advance, which requires no collateral and allows flexible repayment. Business cash advances are offers from merchants which, unlike banks and credit unions, do not base their loans on credit, but on future credit card sales. They will usually need to see that your business is registered in the United States, accepts credit cards, and meets a certain minimum requirement of credit card sales. Business cash advances also offer high loan amounts, often double what a more conventional lender would offer. There is also the increasingly popular option of P2P lending, which allows borrowers to find options they would not otherwise have access to with bad credit. Business financing is available on prosper.com, lendingclub.com, and virginmoney.com are excellent markets for people to look into.
Troubled entrepreneurs may also have the option of using their 401k as collateral for a business loan. While cashing in a 401k is a path more typically undergone by people in personal hardship, it can also be used for financing troubled assets if the sales pitch is right. And as a last resort, an entrepreneur can always turn to the aid of friends and family; the oldest method of bad credit business financing.
