How to Get Around Your Poor Credit for Business Financing
One of the biggest problems plaguing young and older entrepreneurs in their attempt to rise funding for new businesses is credit scores. The number of people with credit scores dropping and becoming bankrupt is rising by the day. Some of this has been attributed to the housing market crash, the volatility of the stock exchange and mounting student debt. Whatever the reason, it has lead to many having to find creative solutions to their funding problems since banks have since become more conservative in their lending locking out such customers.
Many alternative lenders have since established that credit scores are not a good guide as to the creditworthiness of business. They are a reflection on the business owner, but this may not necessarily be so on the business. Many people with bad credit have managed to start and build up successful businesses that manage to make repayment on funds borrowed for their start-up and expansion. For newcomers a great way of getting round the problem of credit scores is by simply approaching investors who do not place as much importance on this factor.
This includes lenders such as microfinance companies, peer-to-peer lenders, angel investors and merchant cash advance lenders. The first two offer business loans with bad credit while angel investors offer equity financing. Cash advances on the other hand are not technically considered loans. All however do not value credit scores in their appraisal of financing opportunities. Besides using alternative lenders, you may also be able to mitigate the problem of poor scores by providing a traditional lender like a bank or credit union with a valuable asset as collateral. Many will also accept the provision of a guarantor or a co-signor to the loan with a very good credit score. In the event of default, they can turn to these other parties for repayment. You will find more useful information when you visit www.badcreditbusinessloans.com.