This little bit was found over at BcsCredit.com. They were touching on small business loans, particularly for bad credit applicants. Not a big read, but some worthy information.
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Small Business Loans for Applicants with Bad Credit
Is it possible to get a small business loan for people with bad credit? People with bad credit who are looking for a small business loan are in for a rude awakening. Most (more than 80%) of loan applications are declined. Many lenders look not only at the business’s ability to repay a business loan, they will also look at the individual business owner applying for the loan. This includes scrutiny of the personal credit report to decide if they will approve the loan. If you are looking for a small business loan with bad credit, there are a few steps to take before going out to find your small business loan.
- Separate your business from your bad personal credit by forming a corporation or LLC and applying for an EIN.
- Use your EIN to establish a business credit profile completely separate from your bad personal credit.
- Build a strong business credit profile while repairing your poor personal credit.
- Prepare separate financial statements for your business that does not commingle any of your personal finances.
Small Business Loans for People Bad Personal Credit Ratings
It may turn out that a small business loan for people with bad credit can be substituted by utilizing trade credit. Trade credit can be used for many of the same purposes as the small business loan would be used for such as:
- Purchasing a product or service for the business
- Purchasing office supplies
- Purchasing equipment
The criteria for getting these types of items on trade credit can be less stringent and may not require any personal credit check or personal guarantee. The process is not easy if you are attempting it without any help. Our business specializes in helping your business incorporate, establish a business credit profile, and build strong business credit even with bad personal credit. Call us at 866.254.6076 to learn more.
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Disclaimer: The views expressed by this author don't necessarily reflect the opinions of Lazerloan.com, it's owners, or it's affliates.
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