Bad credit can hold you back from a lot of things, and it becomes an even bigger issue with small business loans. To the lenders, having poor credit makes you look like a high-risk client, which is the kind of situation most banks typically try to avoid. Fortunately, there are still a couple of ways you can get a business loan even if you have a low credit score.
One of the first ways to secure a business loan is by taking advantage of the Small Business Association’s (SBA) 7(a) loans. These loans are government-guaranteed, which lowers the risk for the SBA. You can get a list from the SBA of lenders who would be more than happy to take a look at your situation. Be sure to speak with an SBA agent before presenting your request to a bank to ensure success.
A second way to get a business loan with bad credit is by offering up collateral for the loan. Collateral can include things such as your home, equipment, other businesses, or land. By providing insurance, you’re lowering the risk of loss for the lender, making them much more likely to accept you. The more you offer, the better off you’ll be.
Have more questions? See more answers from Alot.