Small Business Loan after Bankruptcy

Small Business Loan after Bankruptcy

Small business loan after bankruptcy

There’s no getting around it. Obtaining a small business loan after bankruptcy isn’t a snap. The good news is you can get one.

 

The bad news, you’re going to have to work a little harder to do so. You are also going to have to pay higher interest rates.

 

Whether it is fair or not, lenders see you as a higher credit risk after you have declared bankruptcy. It doesn’t matter that you had a good reason, and getting rid of your crushing debt was the only way to save your sanity.

 

Banks and lenders, while made up of people just like you, see you as a number and not a person. If you can remember that while looking for a small business loan after bankruptcy, then it will be easier for you to not take the questions, and possible rejection, personally, and you shouldn’t.

 

How do You get a Small Business Loan after Bankruptcy?

There are a few steps you are going to want to take. They include the following:

 

1. Get your paperwork in order – Before you start applying, be sure to have all of your paperwork in order. This also includes getting copies of your credit reports from the three major credit reporting agencies. You are entitled to a free copy each year.

 

Once you have the reports, go over them to make sure there are no errors. You don’t want an error to cause your credit score to be even lower than it is.

 

2.Decide how much money you need to borrow – Be sure to take some time with this. Too many business owners fall into the trap of wanting to get as much money as a bank is willing to give you. That only leads to issues down the line. Make a budget and take a good look at what you think you can afford to pay each month in payment.

 

That’s the funny thing about banks. They lend you money and then they expect you to start giving it back to them immediately, and every month after that. It seems unfair somehow, but it’s the way of the world.

 

The last thing you want to do is borrow more money than you can pay back. If you do, you will find yourself in a horrible situation where bankruptcy can even get you out of the hole.

 

Lenders for a Small Business Loan after Bankruptcy

Finding the right lender is where the rubber meets the road, so you are going to have to take a few deep breaths and find the lender that can help you reach your goals without having to pay through the nose to get the money you need.

 

3. Check several lending sources – The truth is your local bank is going to be the hardest place to get a small business loan after bankruptcy. They tend to have the highest lending standards of all sources. Even so, if you have banked at the same place for a number of years, it doesn’t hurt to talk to your local banker. This is especially true if you are borrowing the money for a brick and mortar business in the community.

 

Your next stop should be a credit union. They tend to have less stringent lending standards and are willing to take more into consideration than just your credit score.

 

Finally, there are many online lending options. Some of these lenders work with higher risk borrowers and have options for those looking for a small business loan after bankruptcy. You can expect to pay higher interest rates, however. The truth is, no matter where you borrow money from after a bankruptcy, you will have to pay higher interest rates. It’s just how it is, and there isn’t much you can do about it.

 

4. Pick your lender by their terms – Because you are pretty much stuck with higher interest rates, you will want to look closely at your potential lender’s terms. This includes any additional fees they might add to your loan and early repayment penalties. You want to make sure the terms of the loan are as favorable as possible.

 

Check out These Lenders for Getting a Small Business Loan after Bankruptcy:

 

When you’re ready to apply for a business loan, these online lenders are willing to work with someone after they have declared bankruptcy.

 

1.Personal Loans – If you need a smaller loan this company might be a good fit. They offer personal loans that can be used for business up to $5,000. You can apply online.

 

2. OnDeck – They will work with business owners with credit scores of 500 or higher that need capital. They have a fast turn around time and pretty easy paperwork.

 

3. Kabbage – Kabbage doesn’t use your personal credit score. Instead, they take into consideration how your business is performing.

 

4. Able Lending – They use a collaborative model to help fund your small business loan.

 

If you own a business or want to start one but have declared bankruptcy, don’t fear. You can get the loan you need to get your business started or take it to the next level.

 

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