If you have bad credit, small business loans may be hard to come by, especially during a period of recession. Because of this, people with bad credit who are seeking small business loans must strain their thought processes and put forth a lot of energy and effort into discovering unique and creative ways of finding capital. When you have a great idea for a small business opportunity, the money is usually out there, but more than half of the struggle sometimes consists of discovering where to look.
The grand tradition of turning to bank lenders, when you have Bad Credit Small Business Loans is no longer a credible course of action. If you have a really great idea, you may be willing to sacrifice a lot for it. You might sell your home, cash in all your assets, and even make it a daily habit to collect empty tin cans by the road side in an effort to collect enough money to finance your dream, but there are other options.
Microlenders are popular and work well for people without any credit, who do not have much capital. Since they are based upon the volunteer actions of individual lenders your credit score likely factors in here almost as much as it does a traditional bank. The only difference is that a microlender may not demand collateral, and the process is less rigorous, geared to help people who do not have the means to capital to finance their ventures themselves.
Another avenue that might be worth pursuing if you have bad credit and seek small business loans for a retail venture, or any kind of business that relies upon credit card or debit card transactions with customers, is to apply for a merchant cash advance. Unlike a bank loan, a merchant cash advance is the exchange of future profits on credit and debut purchases for a premium fee, which is usually based upon a percentage of the amount advanced to you. The cash is easily accessible, processed quickly to qualifying businesses, and has no strings attached. It’s also much easier than collecting empty cans.
Once you obtain your advance, which can be used without any restrictions (unlike most business loans), a percentage of every credit or debit transaction made at your place of business will be immediately processed to your provider until, along with the premium fee, the full amount is paid. This is a great way for people with bad credit who can’t get small business loans from conventional lenders to raise the capital to realize their dreams.