These days, your credit score can open a lot of doors for you –provided it’s good enough. If you have a high credit score, you’ll have a relatively easy time getting credit offers from various funding sources. If you’re looking to get funding for your business, chances are that you’re more likely to succeed if you have a good credit score. If your credit score is less than perfect however, there are ways to work around this.
According to Entrepreneur Magazine: “The trick is to fund your business in ways that actually get your score back on track so when you’re ready to move your business to the next stage, your score will start opening doors rather than getting them slammed in your face,”
The money that you need can come from other sources that rely less on your credit rating. Getting business loans with bad credit requires quite a bit of patience and the ability to find the right solution for your needs.
If you choose a credit card or loan you may be charged a higher interest rate as a result of your bad credit score.
You may also opt for using home equity to get funding, but keep in mind that it can be quite risky to put your home on the line.
You could always seek loans from relatives and friends. Your loved ones may be willing to help you make your business dream a reality, while your credit score may not be a factor.
The amendments made to the National Credit Act have made it easier for people to access funds from micro lending institutions. Getting business loans with bad credit may be easier by opting for micro loans. There are various micro lenders who offer finance to entrepreneurs. Some of these lenders may report your payments to credit bureaus which can help raise your credit score.
It’s important to do your research and to find out about various grants. You should try to locate programs that are available for your type of business.