If you are looking to grow your business, then you may find it challenging if you have poor credit. However, there are a number of options that can help your business get the financing with poor credit. Here’s a look at the steps you can take to secure fencing for your business with poor credit.
1) Check your credit score
The first thing that you should do is know your credit score. If your credit score is below 700, then your credit will be considered subprime. Also, this can prevent you from the top business financing options. You can credit your credit score for free on Credit Karma. You can also request one credit report, per year, from the two major credit reporting agencies.
- Experian to include a different link https://www.transunion.ca/
- Equifax - to include a different link https://www.consumer.equifax.ca/
2) Know your options
Once you know your credit score, then you can explore your options. In fact, if you have a low credit score, then you will want to consider the following types of financing options:
- Business credit cards - There are a number of business credit cards that allow customers with subprime credit scores. While these credit cards may have higher interest rates, they will allow your business to get the quick funding that you need.
- Merchant cash advance - A merchant cash advance is an advance based on the credit card sales deposited into your business’s bank accounts. In short, a merchant cash advance can help you get access to your money faster for a small fee. Many businesses used merchant cash advance to gain faster cash flow.
- Short-term line of credit - A short-term line of credit allows you to draw from a pool of funds. When you pay back the loan with interest, then you can draw from the line of credit again.
3) Create a business plan
If you are looking to secure a short-term business loan, it is a good idea to have a business plan. After all, the bank will want to know what type of business that you are in and how you intend to generate revenue. A well-organized business plan will increase your chances of being approved for a short-term business loan.
4) Have collateral
If you have any form of collateral, then you can secure a loan much more easily. Here are some types of collateral that can allow you to get the funds that your business needs:
- Vehicle
- Property
- Inventory
- Unpaid invoices
- Cash
5) Find a co-singer
Finally, you can find a co-signer that can help you secure a loan or financing with poor credit. A co-signer can be anyone from a member of the family to a business partner. The co-signer should be aware that they are liable for the loan if you don’t pay back the principal or the interest.
Getting your business up and running
Bad credit doesn’t have to stop you from funding your business. At 2M7 Financial Solutions, we do not require a credit score to issue a merchant cash advance. Apply now to get a merchant cash advance today.
