Are you facing problems in getting a small business loan with bad credit? Here’s something good for you! Now, it is possible to fund your business with bad credit business loans.
For immediate financing without having to post collateral or other assets to back your loan, consider unsecured business financing. Unsecured business loans offer borrowing flexibility to small and developing businesses while protecting corporate assets.
Small Business Loan with Bad Credit
Running a small business in the UK can be difficult because you need a lot of capital to run your business. However, sometimes you may need more funds to keep going with your business operations. In that case, you may need to get a business loan.
However, securing a business loan is difficult when your business credit score is not good. It is so because lenders check your credit history before providing a business loan.
- If you are applying for a bad credit small business loan, then be prepared to have less flexible repayment terms and pay higher interest.
- Moreover, you will need to provide a personal guarantee that you will pay back the loan if your business fails to pay it back.
- Additionally, if a small business has bad credit, fewer lending options are available for them. Many lenders do not provide loans with bad credit due to the risk of non-payment.
What is Bad credit?
Bad business credit is when your business cannot completely pay off the loan or it may have had problems in paying it on time in the past. Your credit score is checked based on:
- Regularity in the repayments
- How fast have you paid off your business liabilities in the past?
- Default history of your business in managing working capital.
The credit score determines the financial health of the business and its creditworthiness. Therefore, the lender checks your credit record to know about the risk if you’re provided with a business loan.
Steps to get a small business loan with bad credit
If you’re worried about their bad business credit, stop worrying. Having a poor credit record does not mean that you can’t qualify for a loan. Some lenders provide business loans with bad credit.
Step 1: Check your credit report
When you apply for a bad credit small business loan, the lender will review both your personal and business credit scores. Therefore, it’s a good idea to go over credit reports before applying- to confirm that all the information is accurate and current.
Step 2: Apply for the bad credit business loan
The first and foremost thing that you should keep in mind is to be transparent when applying for a business loan. Then fill out the simple application.
The application form will have:
- The details of your business: Basic information about your business including, Business Name, Phone number, and an Address of your business.
- Years of your business trading: If you have a business for more than one year, then you’re eligible for a low-credit business loan. The older is your business, the more the chance of getting the loan.
- Annual revenue: If your business makes good revenue, it gives the lender the surety that you can pay the monthly payments without delay.
- Personal details: You will have to provide personal details so the lender can run a soft credit check on your personal details for anti-fraud purposes when applying for a business loan.
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- Offer Business Collateral
Providing your business or personal assets is one of the best options for securing a bad credit business loan. Since the loan becomes secured against assets that’s why it may be comparatively easy to qualify for a secure loan rather than unsecured business loans in the UK. Hence, it will increase your chances of being approved for a bad credit business loan.
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- Write a strong Business Plan
If you have bad business credit, few lenders may require a business plan. A well-written business plan could convince a lender that you are a reliable borrower. Your business plan will describe your ability to manage cash flow and ensures that it will remain stable over the course of the next 12 months eventually, it will ensure a helping hand from lenders.
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- Find a cosigner
Another choice you can use for getting a business loan is to find a cosigner who will be a guarantor – who would take responsibility for loan repayments if you are unable to pay it. In addition, if the guarantor has an asset that is used as collateral, you will secure a loan.
Although it is not easy to obtain business finance with poor credit. But you can secure a bad credit business loan by following these steps.
Step 3: Contact us to get a bad credit small business loan
24/7 Business Finance can help you in getting a business loan with bad credit.
- We compare options from various bad credit business loan direct lenders and help you get the best deal.
- We will choose the right lender who is willing to give business loans as per your business needs even with bad credit and will negotiate the interest rates and repayment plan.
- We will keep you informed throughout the business loan application process.
So, why wait, when we’re here to help you? Contact us today to get a bad credit loan. You can also get a quote to get the different business loan options available for you.
Apply for an unsecured business loan with 24/7 Business Finance today and start taking control of your company’s finances.
FAQs
What are bad credit business loans?
Bad credit business loans are business loans for businesses with a poor credit history or no credit. These loans are good small business financing options for small businesses facing trouble obtaining loans due to bad credit.
Can I get a small business loan with no credit check?
The lenders run a credit check for anti-fraud purposes and also as a part of the application process to identify your creditworthiness and evaluate the risk of lending.
Do business loan lenders check personal credit?
Before approving your application, business loan lenders check both your business and personal credit histories. If you have bad credit personally, it can hurt your ability to get a loan.
How to get a business loan with bad personal credit in the UK?
It can be challenging to get a business loan with personal bad credit but contact 247businessfinance and we will make sure you get funded even having personal bad credit.
