Understanding Bad Credit Business Loans
Did you know? According to Small Business Lending IndexTM, less than 24% of small business loan applications are approved by major banking institutions.
A bad credit business loan is exactly what it sounds like — a form of business funding from a traditional banking institution meant for individuals or businesses who have less than exemplary credit history. While credit is an important element in determining the amount of funding and interest rate, it isn’t the only thing that matters.
At Fast Capital 360, we evaluate a number of factors to determine how much financing may be available for an applicant. This process also includes what their fees could be if they were seeking a bad credit loan through traditional banking institutions.
Bad Credit Business Loans
While poor credit is a sign of a troubled lending history, credit score can be hurt by a variety of factors, like:
- Late mortgage payments
- Filing for bankruptcy
- High credit card balances
- A large number of credit applications
- Defaulting on a loan
These and other payment issues can harm a credit rating, even if these events took place several years ago. In short, poor credit will further impact anyone’s ability to be approved for a bad credit loan.
For small businesses on their way back to better financial standing, bad credit business loans through a traditional banking institutions enable them to borrow the operating capital they need and pay it back quickly with a payment schedule that is convenient for them.
What is a Bad Credit Score for a Business?
A credit rating between 500-600, which is considered in the range of poor credit to fair credit, will certainly affect the amount of lenders willing to finance a small business. Frankly, the majority of banking institutions don’t even offer loans to those with scores this low. However, Fast Capital 360 is able to finance businesses with credit scores at this level.
While a credit rating at this level could be considered poor credit, closing some avenues to traditional bad credit loans, you may still be able to secure working capital funding.
Traditional lenders like banks have become increasingly cautionary when working with small businesses. Banks see small businesses as a risk they are seldom willing to take, leading them to turn away the majority of applicants they recieve. Even the best highly qualified small businesses are usually asked to provide some type of collateral in their loan agreements, something most companies are not in the position to do.
Another deterrent for banks is poor credit. Banks are likely to turn away any business with poor credit, while even those with good credit are given a hard time.
While bad credit can lead to a business being denied for a loan by banks, so can simply being a woman. While there are plenty of tools in place to help men get the cash they need to grow their business, there are not the same options for women entrepreneurs. Banks are not offering women the credit options they need to grow their businesses. Women business owners have proven to be equally as successful as man to everyone except banks apparently. Banks continue to offer limited options to women ion the same business positions as men, leading them to look elsewhere for loans or an unsecured line of credit for bad credit.
Fast Capital 360 is able to overlook bad credit scores and get businesses the funding they need fast. We’ve even funded businesses seeking a bad credit loan with a personal credit score of below 500. By evaluating other determinant factors in a business aside from personal credit score like business history, operating revenue (a minimum of $120,000) and how long a business has operated for, we’re able to find lending options for those with bad credit.
Fast Capital 360 has provided short-term loan alternatives for small businesses across the country even when their borrowing history isn’t perfect. It’s just one of the reasons that we’ve consistently been considered one of the best resources for small businesses.
Business owners looking for the best unsecured line of credit for bad credit will find Fast Capital 360 a refreshing take on business funding. We know how to help businesses reach their goals, and what options fit them best. With multiple options from the best new business equipment funding to merchant cash advances, we work hands on with each of our applicants to better understand what kind of funding they are looking for and how they intend to use it.
This gives us a better understanding of how their business works and allows us to point them in the right direction, even if it’s not an option that we necessarily offer. If a business fits the criteria that banks are looking for, a traditional bank loan may work better for their business than other options.
However, many businesses will also find that banks can not help them the way they may have originally hoped. Whether it be their lengthy waiting process, which can keep business owners on edge for up to 90 days, or their unwillingness to look past poor credit scores, banks can often be the bearer of bad news for smaller companies. While banks are still the most popular way to fund a business, they are also not the best option for many of these owners.
Fast Capital 360 has become a favorable alternative to bank loans for businesses with bad credit. Even if you have bad credit from previous lending experiences, we’re able to find the right business funding for you in most cases. If you’re looking for business equipment funding or working capital, a poor-to-fair credit rating shouldn’t stop you from receiving the financing you need, even if you’ve been denied a small business loan through a traditional banking institution.
If you’ve been hunting around for the best bad credit funding option, give one of our business advisors a call to learn more. Our merchants have voted us number one in merchant cash advance companies because we find a way to secure funding for every business.
For more information on why Fast Capital 360 is the best choice for a small business with poor credit, contact us today at 800-735-6107.