How Do I Get Business Financing With Bad Credit?

By Gaston Castro

You're looking to get some extra money for your business. Just a little bit of extra cash would help so much. You could purchase that extra inventory you need for the holiday season, upgrade that equipment that's slowing down production, or even expand your business and open another location. But there's just one obstacle, your credit score. Those three little numbers have been coming in between you and business financing for longer than you care to acknowledge, and now it's time to do something about it.

What are My Options?

Quite frankly, banks are hardly lending to anyone right now, so if you want to secure business funds, especially with a less-than-perfect credit score, you've got to think outside of the box and consider some alternative methods of business financing.

In an entrepreneur.com article titled "Funding Options for Bad Credit Risks," author Asheesh Advani informs readers that according to certain studies, bank financing only accounts for 25 percent of total funding needs of early entrepreneurs. "This statistic should provide you some comfort, because it implies that 75 percent of the money you need can come from other sources that rely less on your credit rating," writes Advani.

Fundraising

Fundraising isn't just something that works for schools, girl scouts and churches. A business owner in his/her early stages of business can use fundraising to gain some extra money for his/her business, and have fun doing it. Fundraising also gets your business's name out to the public and allows opportunities for meeting, greeting and networking.

Microloans

A microloan is a loan of $35,000 or less. Since these loans are given in smaller amounts, they are usually easier to get with lower credit scores. Microloans can be attained through non-bank lenders. In order to receive a microloan, however, you may have to provide collateral.

Business Cash Advance

A business cash advance is one of the best bad credit business loan options. Business cash advance lenders focus on a business's monthly credit card sales volume rather than the borrower's credit score. If you own a business that processes at least $2,500 per month in Visa/MasterCard sales then you are halfway to getting your business cash advance. Another benefit of financing a business through a business cash advance is the fact that there is no collateral required.

Payments are made as a small percentage deduction from daily credit card sales over a period of six to eight months, and business cash advance recipients are encouraged to renew their accounts and obtain even more cash once 60 percent of their advance has been repaid.

Gaston C. writes articles about Bad Credit Business Loans for Merchant Resources International.