Finding a guaranteed approval for a small business startup loan is tough, especially for those with bad credit. However, there are ways to get those guaranteed approval startup loans for small businesses. Luckily, there are a few lending companies out there who understand that many startup companies are just a few bucks away from breaking even, breaking profit, or securing a serious round of financing from a VC firm.
Startup Loans with Bad Credit Information:
When one doesn’t have a good enough credit rating to qualify for regular loans, they need to look at other options. Startups generally need some sort of external funding in order to launch themselves into their industries. If you’re an entrepreneur with a low credit score and a new business to get off the ground, you may want to consider some of the guidelines below:
1. Away from Banks:
When a novice entrepreneur wants to get some funding for his venture, he would probably first think about getting a bank loan or a credit card. However, these financing sources are currently only funding around a quarter of new business requirements in most industries. Hence, you should realize that most of your money is going to come from places where your credit score isn’t so important.
There may be some loans and credit cards available for those with low credit scores, but their interest rates are too high for an entrepreneur to risk. There may be a home equity credit line available to you, but putting a home at risk for a completely new venture is not the best idea.
2. Loans from Social Circles:
Many people may jump at the chance to be part of a new business venture, even if they’re not the majority owner or manager. Entrepreneurs may hence find several friends and family members willing and able to invest in their dream.
Credits scores won’t matter much in such cases, since those close to you would trust you. They would know how hardworking you are as well as how much work and thought you’ve put into your idea.
Private loans from such individuals could also work towards enhancing your credit rating. This would happen with a loan management organization servicing the loan and your reporting to the credit bureau about repayments.
If you identify private lenders and assess their risk profiles properly, you can have a wealth of capital at your disposal very quickly. The interest rates should also be lower here, if not zero. Plus, this is patient capital, meaning that you don’t have to be in such a rush to repay it.
3. Web-based and Microlenders
There are plenty of lenders out there who work through the internet, not the bank. They can offer $5k to $25k to new businesses without considering their credit scores too seriously. Even an injection of this scale could really help out a struggling business. Using these web-based options would also make the credit bureau aware of regular repayments on your part.
One should look around and consider all the options available. Each microlender would have its unique rates, conditions, risks, and benefits. The sites below may help to start the search for microlenders:
If one has a low credit rating, there would be high interest rates from the sites above. When one takes business loans from their social circle, the average rate is around 7.6%. With the first site here, Accion, the rate is around 12%, while Prosper’s rates are 20%.
If one is used to credit cards, these rates are still reasonable. However, keep in mind that microlending loan programs wouldn’t usually allow partial repayments. Credit card payments are a bit more flexible.
You may also look for microlenders that are subsidized and can hence offer flexibility. However, such lenders are usually too small to have websites or online forms.
The nonprofits at www.microenterpriseworks.org have programs that could help out entrepreneurs with low credit ratings. Any state would usually have one microlender at the very least. Some businesses would prefer lenient repayment terms to lower rates, so see which works best for you.
4. Free Money:
There may be grants or some gifts available for business like yours, which would require no repayments. These may be difficult to find and obtain. Many ‘services’ would claim to help in this search, but they’re not all reliable.
You’d have to do most of the legwork to find a relevant grant for your business. It helps if you’re operating in the technology, retail, or healthcare sectors, especially within a low-income territory.
There is also free money from personal contacts, free space from ex-employers, and free service from our business and personal connections. With some creativity, anyone can greatly cut their startup expenses by approaching individuals who can provide either gifts of money or flexible loans.
Lenders Which Offer Bad Credit Startup Loans:
Startups #nofilter has broken down all of your options to finding you bad credit busin
ess loans for your startup, with hopefully a guaranteed approval:
Fundlift Capital: Unsecured Lines of Credit Business Funding Program
When looking for unsecured startup loans, Fundlift enters the conversation with some really hopeful promises: “…unsecured lines of credit that provide the entrepreneur with a financial cushion to launch a new business. Whether you need additional capital to add the finishing touches on your business before its grand opening or financial assistance with start-up operating costs, this program is promised to establish your new business for long-term success.”
Fundlift goes out of there way to make startup appliers feeling welcome. Additionally, Fundlift promises unsecured loans available without a credit check required. Additionally, they offer guaranteed approval for unsecured personal loans with low interest. This could be ideal for a startup that needs cash and fast. Speaking of fast, they also offer merchant loans for startups who are in a hurry. Check them out here.
FastUpFront: Bad Credit Business Loans & Financing Solution
FastUpFront is very familiar with the world of bad credit and small business loans, and seem to know the best deals available for startups in need of cash with guaranteed approval. That is why FastUpFront actually recommends that a fledgling startup company avoid a bad credit business loan, and rather should apply for a business cash advance, which is becoming a very popular business loan alternative.
The reason why they promote business cash advances is for three reasons:
- Repayment options are much more flexible in this method
- These loans may be unsecured and require zero collateral from the startup company
- Bad credit is not a hindrance when applying
And for those startup companies that need money quickly, and without a hassle or positive credit, FastUpFront offers 24 hour delivery on money. Sometimes speed is just as important as the process, which is why FastUpFront might be a decent financing option if you have bad credit. Check them out here.
Merchant Advisors: Guaranteed Bad Credit Business Loans for Small Businesses
Merchant Advisors prides themselves on securing financing and loans for startup companies with bad credit. And not only will they help with the funding, but they go a step further, by offering to assist with your credit history: “…helps you establish a positive credit history personally and through your business”.
This service puts a big emphasis and focus on your business performance rather than your credit history. So essentially, there is a good faith aspect here, and they are looking to assist startup companies and small businesses who don’t have good credit but otherwise have a promising outlook in business.
They offer full transparency, and promise not to judge a startup company by its credit, whether it is poor, bad, or non-existent credit. Check them out here.