Can I Get a Business Loan if My Credit Score is Low? - Your credit score is one of the factors that lenders use to determine your eligibility and terms for a business loan. Generally, the higher your credit score, the easier it will be to get a business loan with favorable terms, such as lower interest rates and longer repayment periods.
However, having a low credit score does not mean you cannot get a business loan at all. There are some lenders that offer business loans for bad credit, or loans that do not require a credit check. These loans typically have higher interest rates, shorter repayment periods, and lower loan amounts than traditional business loans.
Some examples of business loans for bad credit are:
- Invoice financing: This is a type of short-term loan that allows you to borrow money based on your unpaid invoices. You can get up to 85% of the value of your invoices upfront, and the rest (minus fees) when your customers pay. The lender does not check your credit score, but rather the creditworthiness of your customers. Invoice financing is offered by lenders such as BlueVine, Fundbox, and Rapid Finance.
- Merchant cash advance: This is a type of cash advance that gives you a lump sum of money in exchange for a percentage of your future credit card sales. The lender does not check your credit score, but rather your sales history and revenue. Merchant cash advance is offered by lenders such as Credibly, Biz2Credit, and OnDeck.
- Microloan: This is a type of small loan that is designed to help entrepreneurs and small businesses that have limited access to traditional financing. The loan amount ranges from $500 to $50,000, and the interest rate varies depending on the lender and your credit profile. Some lenders may check your credit score, but others may not. Microloan is offered by lenders such as Kiva, Accion, and Opportunity Fund.
These are just some of the options you may have if you have a low credit score and need a business loan. You can also try to improve your credit score by paying your bills on time, reducing your debt, and checking your credit report for errors. A higher credit score can help you qualify for more types of business loans with better terms in the future.I hope this information was helpful...😊