Can You Get a Business Loan With Bad Credit?

Are you one of the 53 percent of credit-active consumers in the United States who have bad credit?

If yes, it can be comforting to know that you’re not alone. However, that’s where all the comfort ends. The consequences of having bad credit can be far-reaching. For instance, landlords can deny you rental housing citing your credit history.

If you’re an entrepreneur, you might be wondering whether it’s possible to get a business loan with bad credit. You probably know that bad credit will dent your chances of getting a personal loan. But what about a business loan?

Continue reading for deeper insight?

Can You Get a Business Loan with Bad Credit? The Short Answer

Yes, it’s possible to get a business loan when you have bad personal credit. That’s the short answer.

However, getting approved for this loan when your credit isn’t looking up isn’t that easy or straightforward. You need to know your way around this lending market if you’re to stand a good chance of getting the loan.

Here are some of the things you can do to get a business loan with bad credit.

Know Your Credit Score

You know you have bad credit, perhaps because you’ve been denied a loan before. But how bad is bad credit?

It’s not surprising to learn that a good number of Americans don’t know their credit score. Yet, this is one of the most important pieces of information you can have when you want a loan with bad credit.

Bad credit score ranges from 580 to 669.

Lenders don’t necessarily treat these scores the same way, even though they’re generally bad credit. It’s possible to find a lender with a bad credit score requirement of say 620 for loan approvals. So, if your score is 620 or above, you’ll get approved, assuming you meet all other requirements.

When you know your credit score, it’s easier to choose the right lender, so you don’t waste time applying to lenders whose credit score requirements you don’t meet.

Have Business Documentation

When you’re applying for a personal loan, lenders want your personal details. When you’re applying for a business loan, lenders want your business’ details.

As such, prepare business documentation before applying for a loan. This could be a business plan, certificate of incorporation, bank account statements, and/or any other document that can prove that the business exists.

Find a Suitable Lender

When you want a business loan with bad credit, you shouldn’t waste your time applying to your local bank. Traditional banks typically don’t give loans to people with bad credit.

However, there are several companies, such as Inspyre Funding, that specialize in making business loans to entrepreneurs with bad credit. You need to find such a lender, research its requirements, then make an application.

Bad Credit Shouldn’t Stop You from Getting a Business Loan

You need a business loan to start or grow a business or even sort out an emergency. Don’t let bad credit stand in the way of getting a business loan. As long as you know how to approach the lending market, you can get a business loan with bad credit.

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