The main factor for any startup business to getting a loan usually lies in the current value proposition and vision.
In case you have some time, you can focus on repairing the available credit score for qualifying towards better terms & funding. Here are some options to consider to obtain bad credit business loans for startups:
- Seek Loan from Your Inner Circle: When you have a bad credit score and still need a good funding, the first place that you can look up to is your inner circle including friends and family members. You can ask for help from your close circle of friends and relatives who might help you out when you are in dire need of the same. They might wish to see you succeed in your business. As such, they might not even dwell on your poor credit score while giving the funding. However, before taking loan from your inner circle, you must consider all the benefits along with the consequences of this action.
- Look Beyond Financing Options of Bank Loans & Credit Cards: Several studies have revealed that bank financing and credit cards contribute to just 25% of the overall funding needed by any startup business during the early stages of business development. While there might be lending programs and credit card options intended for those with poor credit score, there are chances these funding options might charge higher rates of interest for compensating for the overall credit risk that might be posed by a low-credit borrower. Therefore, you must look for other lucrative options in case of a low credit score.
- Search for Web-Based Lenders & Microlenders: There are various options of non-banking lending programs & agencies available on the Internet that might be offering micro-loans to the first-time or naïve entrepreneurs. Some of these web-based funding options serve to be excellent sources of the required capital for those having poor credit. In addition to this, these lending options might also report the payments by the borrower to credit bureaus which would immensely help in raising the overall credit score when you would be making timely payments.
- Grants & Gifts: These are not loans. This is because you are not required to pay the amount back in these cases. The main catch here is that these are usually funded by tax dollars. Therefore, these usually come with strict regulations upon their overall usage. Though it might be quite difficult to obtain funding through this form, still it be highly profitable if you get one.
Try out the best ways to obtain business loan with a low credit.