Your credit score—made up of five pieces of data: payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%) and credit mix (10%)—can either help you soar, or be an albatross that stymies your growth. You may be aware of what constitutes an excellent credit score (800 and up), but did you know that those with scores from 300 to 629 are defined as having bad credit?
What are the consequences of having bad credit? One of the biggest for a business owner is potentially being limited from receiving a business loan from a traditional bank. Banks may not choose to look past that number, so many owners with bad credit have found themselves on the receiving end of a “we regret to inform you…” phone call or letter. But does that mean game over? No!
Alternative lenders offer small business loans to owners like you who have less than perfect credit. Two loan types, in particular, are often of interest to small business owners who have bad credit:
- Working capital loans. Secure cash to pay for anything that helps you support your ongoing operations, including expenses like payroll, taxes, equipment and supplies.
- Lines of credit. Have access to cash when you need it, so you’re able to take advantage of growth opportunities and get through potential slow times.
Since these loans are considered riskier, they will likely be more expensive, i.e., have a higher interest rate and more restrictive terms, than a bank loan. However, if a bank loan isn’t in the cards, you can still get the cash infusion you need—despite having bad credit—but you should make sure you receive the best terms possible and can manage the payments.
How to Apply
While an alternative lending partner is willing to look past a bad credit score, that doesn’t mean it won’t require documentation to gauge your ability to repay the debt. It will ask for:
- How long you’ve been in business
- What your annual revenue is
- How strong your cash flow is
- What kind of collateral you can provide
If you’re interested in securing a small business loan with bad credit, apply today. It’s easy. Give Clear Skies Capital a call at 800-230-9822 or apply now. We’re here to help, and you’re under no obligation.