Every business needs funding. But unfortunately, not all businesses have a good credit score. A credit score is one of the most important things that lenders will consider while giving you the loan. Banks are reluctant to give loan to someone who has a bad credit history.
There are a lot of alternative options available. Therefore, even with a bad credit score, you can still qualify for some of the best loans. Below are some excellent options for loans that you can qualify with a bad credit score.
Short term loans:
Short term loans are easy to qualify, and the funding process is fast. It is more like a condensed version of conventional loans that are offered by the bank.
In regular loans, you have to pay a lump sum of cash to finance the project for which the funding is required. And then you have to pay the interest according to a predetermined payment schedule. The repayment terms of conventional loans can extend up to 30 years. Whereas, short term loans usually last for 18 months or a little more than that.
You can use short term loans for any business purpose. In these types of loans, you don’t have to worry about your bad credit score. Several alternative lenders offer short term loans for businesses with bad credit because there is less risk tied to these loans. It is because the repayment time is short and even if you fail to repay, the money will also be in a small amount.
One short term loan option is the Revenue based advanced loan, which is is an option to get cash immediately for your business, in exchange for funds deducted directly from your credit/debit card payments in the future.
Speed: 24-48 hrs
Factor rate: 1.09 -1.49 (Terms: 3-18 months) Factor rate means the person will pay back the loan multiply by the factor rate
Amount: $2.6k – $1m
• Personal Credit Score above 500
• Monthly Revenue above $4000
Note: (Usually you can qualify for funding up to 120% of monthly revenue, so if monthly revenue is 10000, funding is usually around $12000)
Invoice financing, which is also known as accounts receivable financing or invoice discounting, is an alternative finding product that will convert your invoices into cash for your business needs. In this option, you don’t have to worry about collateral or bad credit scores. This is because your invoices will serve as the collateral and the creditworthiness of your customers will take care of your credit score.
Among many other funding options, this one is hassle-free. This is because if you are working with your clients with good scores, then lenders will not feel reluctant in giving you the loan. The alternative lenders will simply look past the credit challenges that your business has faced in the long run.
You can expect to receive about 80% of the value of your accounts receivable upfront. You’ll get the other 20%—minus the factor rate—once the client pays their invoice.
The factor rate (also called a discount rate) is a percentage of the invoice value, charged weekly or monthly. Factor Rate 0.5–5% per month.
Minimum Qualification Requirements
•Must be an LLC or Corporation, no sole proprietors.
•Must sell B2B (business to business) or B2G (business to government) and sell on payment terms generating accounts receivable (waiting to be paid Net 30, Net 60 or Net 90 from their customers, for example).
•Must generate a minimum of 40K in receivables monthly.
•Must be ok with a 12-month Factoring agreement. We’re looking for a relationship (we’re able to continuously provide funding as quickly and as often as the business owners are generating sales/receivables).
Equipment financing is a loan option for business owners to purchase a physical asset (equipment) for their business (like a landscaping business purchasing a lawnmower). Amount: Up to $5m per piece
Startups can get funding up to $50,000, could be more depends on the schedules
Speed: 7-15 days
Rate: starting at 5% (Term: 1 to 5 years)
● Personal Credit Score above 580 (with good quality or track records) (680+ for startups)
● Revenue showing he can pay back the monthly payment.
Equity based loan
Equity based advanced loan is an option for people that want to use the equity on their home to get a loan. Approval Speed: 24-48 hrs Factor rate: 1.09 -1.49 (Terms: 3-18 months) Factor rate means the person will pay back the loan multiply by the factor rate
• Personal Credit Score above 500
• Own Equity on a Home.
Visit 24 Hr Fast Funding Capital to To Apply for loan options with bad credit score