How to Get Business Loans with Good or Bad Credit

How to Get Business Loans with Good or Bad Credit

How to get business loans is mostly about where you are in life.

Meaning, what your credit history is, the business experience you have, and how well you have planned for the future and finding the right lender before you apply.

The rest is easy. Fill out a little paperwork, create a business plan, and sign over your first born and you’re good to go.

Of course, I’m just joking about the first born. That is unless you try and get a loan from your bank, then they may want your second born as well, but let’s get down to it.

So, you haHow to get business loansve a great idea for a business rattling around in your brain, but your pockets are empty. Isn’t it always the way. It seems like when you’ve got a lot of one thing, you don’t have enough of another.
That’s especially true when it comes to business. You either don’t have enough time or enough money. Chances are, if you are reading this blog post, you’ve got plenty of time, but you’re short on cash.

Never fear as I am here to help you get the money you need to get your business off the ground or to the next level.

How to Get Business Loans – The Worst Case Scenario

Answering this question, how to get business loans, is more about your personal situation and what type of loan you are looking for. There are all types of business loans with all types of interest rates and terms. Let’s face it, you already know the answers to the following questions:

 

  • Do you have poor, good, or excellent credit?
  • Do you have experience in the business type you are planning on starting?
  • Have you really thought through how you will operate and manage your business?

It’s the answer to those three questions that lenders are looking for. So, if you already know the answers then you just need to match your answers to the right lender, and that’s what we are going to do below.

So, let’s take the worst-case scenario first. You’re hot on a business idea, but in the past, you haven’t had the best of luck when it came to making good credit decisions.

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In fact, you’ve had a hard time paying your bills on time and you’ve watched your credit score sink lower and lower over the years. You may have also had a bankruptcy sometime in your past.

This certainly doesn’t make you a bad person or someone unworthy of starting a business or finding a fresh start, but it does make you appear to be a credit risk to some.

If this sounds like you and your credit is poor, then you’ll have to deal with certain realities such as:

  • You won’t be able to get a loan at a bank
  • You will have to pay high-interest rates
  • The amount of money you can borrow may be limited
  • You will have fewer lenders to select from

Okay…none of that sounds great, but before you click out of this page and think you will never be able to live your dreams, wait a minute.

TopBizTip: There are lenders who will give you a small business loan even with bad credit!

When it comes to how to get business loans if you have bad credit, there are some great lenders. A couple of my favorites are OnDeck and Leads Gate.

OnDeck does require you to have a credit score of 500 or higher and you need to already be in business for at least a year. You also need $100K in business revenue in the past 12 months.

They provide term loans up to $500,000 and lines of credit up to $100,000. While they only require a personal credit score of 500, OnDeck is also a great option for those with good credit as well. That’s because those with the best credit history may qualify for interest rates as low as 5.99%.

For those of you who aren’t in the top brackets of the best credit scores, expect higher interest rates.

Another nice feature is that they also have prepayment options that can include a reduction in your interest rate, so that is something to keep in mind when checking them out.

Finally, they do have an A+ rating with the BBB, so you can feel pretty comfortable with getting a small business loan from them.

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If all of that sounds completely out of the question, then Leads Gate might be the answer for you. Leads Gate lets you fill out one application and will then match you to the best lender available through their network.

You can receive up to $3,000 and the money is deposited in your bank account. This usually happens very quickly and even within 24 hours. You can apply here.

How to Get Business Loans – The Better Scenario

Okay…so your credit history isn’t so bad after all. In fact, your doing pretty darn good when it comes to spending habits and paying bills on time. You’re in the good to even excellent category.

Using FICO scores, that means if your credit score is between 670 and 739 it’s good. If it falls between 740 and 799 it’s very good, and if it’s between 800 and 850 you rule the world.

Actually, FICO considers the top range exceptional. You might have to perform a couple of miracles on top of your exceptional score to actually rule the world.

The most important point when it comes to how to get business loans is that with a higher credit score, you have more options. The bad news is that even with the best credit scores, getting a business loan for a new business at your local, friendly bank is still almost impossible. They just don’t like the risk.

You can ask. You can even ask very nicely, and chances are, they will still say no.

TopBizTip: Make sure you have a business plan that shows how you’ll pay back the money.

Never fear…there are many online lenders with great BBB ratings that are downright excited to lend you money to start your business or help you grow it.

One of the best is Lendio. They give you access to 75 lenders. It’s like applying 75 times but only having to fill out one online application. You’ll have a funding manager to help you with the process.

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They have loans for as little as $500 and all the way up to $750,000. They even have startup loans, so if your business is still just a twinkle in your eye, you still have financing options with Lendio.

They want to see two years of your personal tax returns and also look for a credit score of 680 or more. So, that’s a bit more than a bad credit business loan, but it still isn’t so high that only a few will qualify.

Finally, be sure you have some experience in the type of business you want to start because they will want to make sure you know what the heck you are doing before they hand over the cash.

 

Another option is Price Business Funding. They want a personal credit score of 630 or higher and expect that you have been in business for at least six months. You also need to have at least $10K in revenue each month.

 

How to Get Business Loans – The Bottom Line

How to get business loans isn’t difficult. You need a plan, your personal credit score, and if you are already in business a copy of your financial statements. Beyond that, it is all about where you fall on the credit score spectrum.

If you are serious about starting a business or growing the one you currently have, then you will do what it takes to get it going and that is how to get business loans. That may mean paying a higher interest rate than you’d like or taking a leap of faith. Whatever it is, you won’t know what you can do if you never try.

Let’s be real here for a minute. You already know what your credit is like, so take that information and apply to the right lender, and you up the chances of being approved by about 90%. Don’t waste your time and apply to lenders that will slam the door in your face. It is demoralizing and soul crushing.

Related Information:

Business loan criteriaBusiness Loan Criteria – What You Need to Get Approved for a Small Business Loan

 

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