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Can I Get a Business Loan with Bad Credit?

A sample approved business loan form.The fact is that if you have bad personal credit, you are severely limited when it comes to finding business financing. However, it is not impossible to get business loans with bad credit. There are three things you have to have to get a small business loan with bad credit:

Credit Report

One of the first things you need to do is make sure that you actually have bad credit. For many people, their credit is poor, but not bad. Since it is not as high as they are used to, they think it is bad.

Find out what the lenders actually think is bad credit. Then, get your credit report, and do a good sweep of it to make sure everything is accurate, and that any mistakes that are on it are addressed right away. Look at your credit report and see if you have any R9′s. If not, you should be fine, but if you do, you will need to explain them to the lender or there is no way you are going to get a business loan.

Collateral

If you want to get a business loan with bad credit, you have to have something to leverage the debt. Assets that are worth something are a must if you have bad credit and want a business loan. This might be cash, real estate, vehicles, machinery, etc. Basically, provide the lender with some reassurance that if you were to default on your loan, there is something of value they could collect to minimize their losses. Getting an unsecured business loan will not be possible with bad credit.

Comprehensive business plan

If you have bad personal credit, your best chance at getting a business loan is to have a great business plan. No lender is even going to look at you if you don’t have a great business plan. Make sure you include why you are qualified to work in the industry, what your competitive advantages are, what you do, who your competitors are, and why you can beat them out for market share. Do not assume the bank knows what your plan is, or why you are better, spell it out in a comprehensive business plan that they can easily read.

Last, but not least, if you have poor personal credit and want to get a business loan, consider establishing some business credit that you can use to apply for a loan in the future. If you can’t get an SBA loan or some other traditional loan, there are other options. Lenders all have different qualifications, so if you aren’t a good fit, you might be for a different lender. You also may qualify for a business line of credit, microloan, peer to peer loan or a cash advance.

Don’t give up if you get turned down initially. Most business loan applications get rejected. There are other options. Lendio can also help improve your business credit to qualify for better financing.

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About the Author

  • Nelson James

Comments

  1. I would like to see if you could help me to get a loan for my small business .

  2. I have a product that not only have created, designed and hold an approved 14 yr. Patent and 7 yr. TM as well. This is product that has sold not only to people in the USA , but also in Canada, and overseas. My largest problem is I cannot get any financing unless I pay up front monies to companies and or SBA Loans.
    Without this money I cannot go forward and fill orders that are now pending with companies and people If you are looking for a good investment then it is me. I can be reached at; 813-926-2364-office or 813-359-3060

    Gary Hoskins, Pres
    Rocket Pockets Global Games, LLC

    • Gary,

      Have you created a Lendio profile? It’s possible we can match you with the right loan and lender.

      • I tried to apply at lendio and it said the length in business wasn’t long enough,,i thought this would be a start up site

        • Hi Craig,
          Lendio matches small business borrowers to banks, credit unions, and non-bank lenders—it’s not designed to help you find investors or crowd-sourced resources. Although there are a lot of options for financing a small business, that initial “thought” or “development” stage is tough. Best of luck with your start-up.

  3. I am currently seeking funds in order to expand my business and take it to the next level by seeking commercial property which would mean start-up for this expansion from a home-based business to this. Can you help?

    • Monique,
      The first thing you should do is complete a profile on Lendio. After you answer a few questions about your business, you can see if you get matched to any of the lenders on our network.

  4. This is great information. It’s hard to find funds for your business if you have bad credit. My co-worker found a company for his construction business that did not do credit checks to apply for the loan. http://www.simplebusinessfunds.com
    You must be in business for at least 1 year and generate a gross income of at least $150,000.

  5. Hi
    I am a citizen of Iran.
    I live in Tehran.
    I am engaged in construction work
    I need one million dollars
    5 to 10 years to repay
    With respect

  6. Need businessloan urgently,please no scammers and upfront fee