How to Get Business Financing With Poor Credit

Businesses need a robust cash flow to sustain their operations and generate profits. At times they may need to borrow funds to acquire resources, maintain operations, or grow. Unfortunately, various factors can adversely affect a business's ability to borrow from traditional financial institutions. These factors include having a poor credit history or insufficient credit history, missed or late payments, high debt-to-service ratio, bankruptcy, records of default, or simply being a relatively new business.However, there are many funding solutions available for Small Businesses that don’t fit the bank or credit Union model.These options are:

1. Merchant Cash Advance

A merchant cash advance is a financing option that offers businesses a lump sum cash payment in exchange for a percentage of their future credit card or debit card sales. This type of financing is best suited for businesses that require quick cash and have a high volume of credit or debit card sales.The primary advantage of a merchant cash advance is the speed and ease of accessing immediate cash funding. The process typically takes only a few days, and the funds become available within a short period.Business owners should take in account that although merchant cash advance is a convenient cash flow instrument and allows you to get funding within a few days, it may come with higher fees and interest rates due to their quick access to cash.

2. Invoice Factoring or Cheque Factoring

Invoice factoring, also known as cheque factoring, is a financing option that enables businesses to utilize their outstanding invoices in exchange for a cash advance that is immediately available. The lender collects payment from the business's customers and pays the business the remaining balance minus the financing cost. This type of financing is ideal for businesses with bad credit history since their ability to borrow is based on the creditworthiness of their invoice customers rather than the borrower. Businesses with long-term contracts, high-value invoices, or those needing cash to immediately purchase materials to fulfill high-value invoices should consider this type of bridge financing.Manufacturing, construction, transportation, and wholesale/distribution are businesses that can benefit from this type of financing to meet their immediate cash flow needs.The main advantage of invoice factoring is that the lender typically assumes responsibility for collecting payment from the invoice customers or payers. This can free up valuable time and resources for the business to focus on other aspects of their operations. Furthermore, businesses with long payment cycles, delayed payments, or long-term contracts that involve milestone payments can obtain the necessary cash to expand or continue operating their businesses immediately.Similarly to merchant cash advance companies, factoring lenders may charge a high fee for assuming the risk of collecting on the invoice and the time gap until the invoice is due for payment.

3. B-Lender Loans

B-Lender loans are non-traditional financing options provided by private equity firms or online lenders. These lenders are often willing to lend to businesses with bad credit or little credit history for various purposes. They understand the complexity and cash flow requirements of small businesses and work with them regularly. This type of loan comes in various sizes and forms, depending on the business needs and the business entity's qualifications and lending risks.B-Lender loans are a great financing option for start-ups, small businesses, seasonal revenue businesses, or those in urgent need of short-term financing. Traditional lenders typically require creditworthiness, good credit history, and collateral, but B-Lenders often have significantly more flexibility. These lenders are specialized in dealing with the complexity of newer and smaller businesses and can provide loans with less stringent due diligence processes and quicker turnaround times to meet business needs.However, it is highly advisable for borrowers to understand the terms of the loan and carefully review the terms and conditions before accepting them. B-Lender loans are less standardized and customizable and can vary significantly in terms such as repayment, interest, default events, settlement, and legal jurisdiction. Businesses should also be aware that B-Lender loans may come with higher fees and interest rates due to their higher risk tolerance.B-Lender loans can be a great option for businesses that are just starting or facing challenges with traditional lenders. These loans can provide flexibility, speed, and customized financing solutions to meet their specific needs. However, careful consideration of the terms and conditions and full understanding of the associated costs are crucial before committing to this type of financing.

4. Instant Payday Loans

Instant payday loans are short-term loans that can be used to cover unexpected expenses or emergencies. They are easy to obtain and are often offered by online lenders. Borrowers may receive access to immediate relief cash within hours, thanks to the quick and standardized approval process of the lenders that provide these loans.Instant payday loans are suitable for individuals with emergency cash needs or who need access to immediate cash to cover unexpected expenses. Some typical uses for instant payday loans include medical bills, car repair bills, and home repair bills. These loans can offer immediate cash relief to ensure a person has the cash to cover daily living needs to continue working and earning money.Payday loans can be useful for individuals who have low credit scores or limited credit history and may not qualify for traditional loans.Borrowers should know that instant payday loans typically have high interest rates and fees for their ease of access and quick approval process. The repayment period is often within two to four weeks. As these loans can be accessed quickly and easily with minimal documentation requirements, these could be beneficial for individuals who need immediate cash and don't mind the associated fees.In summary, there are various types of non-traditional lending and financial services available to businesses and consumers in Canada. These services can provide cash relief for a variety of situations, depending on the borrower's needs and qualifications.Merchant cash loans are suitable for businesses with high credit or debit card transaction volume and immediate cash needs. Invoice or cheque factoring can benefit businesses with valuable invoices with longer repayment terms. B-Lender loans are a great option for start-ups or small businesses with an immediate cash need to expand or maintain operations. Instant payday loans can provide relief for individuals with unexpected or emergency cash needs.Overall, non-traditional lending and financial services can provide valuable solutions for businesses and consumers with unique financial needs. It is also vital to approach them with caution and careful consideration of the associated costs and repayment terms. With the right lender and loan terms, these financial services can help businesses and individuals overcome cash flow challenges and achieve their financial goals.

Most people will never know what it is like to have true financial independence. However, you don’t have to be one of them. By taking the right step today, you can build wealth that can allow you to have the passive income that you need to achieve financial independence. Here are five steps that you can take today.

1) Create a plan

The first thing that you need to do is have a plan. Figure out how much of an income you would like to have after you officially retired. The rule of thumb is that you should save up to 25 times your annual desired passive income. For instance, if you would like to get $50,000 annually in passive income, then you would have to build up to $1,250,000 in your savings by the time you are planning to retire.

2) Save and invest

To start building the wealth that you need for financial independence; you will need to save and invest. Don’t worry if you don’t currently have a high income. You can have time to work on your side. Through the magic of compound investing, you can build some incredible wealth by investing in stable, dividend-paying stocks. Aim to save at least 10% of your income each month to achieve your financial independence goals.

3) Live below your means

As you get older, you will likely increase your income. This can lead to “lifestyle creep” which can cause you to spend more. It is important to continue to live below your means so you can save and invest. The higher rate of your savings, the faster you can achieve financial independence.

4) Have an emergency fund

One unforeseen medical or life emergency can derail your financial independence plans. Therefore, you will want to have money set aside in case the unexpected happens. Some situations that may require emergency cash include a setback in your business, medical emergencies, or a natural disaster.

5) Study the economy

The economy plays a big role in how your business operates, the purchasing power of your money, and your income. Be sure to study the stock market, the economy, interest rates, and other factors that can play a role in your business and investing life. A great way to stay on top of the economy is to read top economic books and to read up on the latest economic articles on sites such as Bloomberg, CNBC, and The Wall Street Journal.

Keep your business on track and achieve your financial goals

Make sure that your business stays on track. With 2M7 Financial Solutions, you can receive the merchant cash advance that your business needs to stay on top of expenses. To learn more, please contact us. We are always ready to assist your business today.

Marketing is one of the aspects of your business that takes a lot of your revenue. Business owners are sort of blackmailed into spending too much cash just because they have to outweigh their competitors and sort of 'steal' customers away from them. That's how the world of business works. However, a small business is already short on funds, and they can't pour that much money into marketing without affecting operational costs. If you find yourself in a situation where you need to up your marketing game but don't have the funds to do so, you're at just the right place. Here are five things you need to know about marketing small businesses on a budget.

1.   Stay Active on Social Media

Social media is one of the best forms of marketing that you have, and it's totally free. A lot of businesses look at social media as a tool just for outreach. It's a lot more than a way just to communicate with your audience. Social media provides your business with access to millions of people all over the world. The best part is that it doesn't matter what kind of business you have. You'll find tons of customers through social media.

2.   Focus on Loyal Customers

Finding new customers is something that every business has to do to survive. You have to scale your business to grow substantially, and that can only happen when you have new customers. However, in an effort to obtain them, companies often overlook their current loyal customers. We consider that a huge opportunity being missed. You can offer rewards, dedicated customer support, and discounts to ensure that these people stay interested.

3.   Think of Local Communities

Many businesses can take advantage of their local communities for growth and brand recognition. The best part is that you can advertise your business at some charity events, major gatherings, fairs, etc.

4.   Reward Programs

Your current customers can be a gateway to obtaining brand-new clients as well. Reward programs are an amazing incentive that encourages people to recommend your company or service to their friends and family. Word of mouth drives an average of $6 trillion in revenue for businesses globally. That's more than enough incentive you need to start a rewards program.

5.   Merchant Cash Advance

If you're planning to ramp up your marketing efforts but don't necessarily have the budget on-hand to make it happen, there are many financial organizations in the market that provide merchant cash advances. These MCAs are a lot different as compared to standard business loans. Instead of having to pay the money back in a lump sum, you’ll be returning the money through a percentage of your profits.

Closing Thoughts

Marketing does work, especially when it's carried out effectively and with consistency. Many will argue that it's one of the most profitable and, if you can’t seem to get your marketing done on a budget, 2M7 financial solutions is here to help you. We offer merchant cash advance to businesses in Canada. So, if you need some extra cash to fund your marketing campaigns, give us a call today to learn more.