How To Find A Commercial Loan With Bad Credit
A personal bad credit record,score or rating can seriously impact your ability to apply for a commercial loan through regular financial channels such as banks and other types of loan providers. There are many reasons why your business may need a commercial loan with bad credit:
- To purchase assets, equipment or inventory that are critical to the operation of your business.
- To fund projects or contracts that are essential to the profitability of the business.
- To invest in property, assets or other businesses.
- To fund real estate projects.
- To expand operations to meet the growing needs of the business.
- To manage working capital and to cover daily costs of operations while waiting for invoices to be paid or other forms of income.
The ability to get commercial finance when your business needs it most can mean the difference between expansion and stagnation, success and failure. However, there are alternative options available when looking for a commercial loan with bad credit:
- Assessing Your Credit Score
Commonly, traditional lenders will not grant a commercial loan if your personal credit score is below 500. Some financial providers may however go as high as 650. If your credit score is between 500 and 650, it is a simple matter of searching for a loan provider that does make financial arrangements for businesses that do not have the ideal credit record. If you score is below 500, you may need to look at alternative funding solutions.
- The Value Of Invoices
Your credit score may be taken into consideration with the value of your invoices – in other words, the amount of money that is currently outstanding on your books from your debtors. This process is called invoice factoring or accounts receivable loans and some loan providers may not take your credit record into account at all when offering this type of business financing option. They will simply take over the management of your invoices and collect from the debtors to recover the amount of the loan.
Invoice factoring loans will normally provide you with 80% of the total value of your invoices and pay the other 20% to you when the invoice is paid. However, you do have the option to access as little or as much of the total outstanding invoice value as your business needs. These type of loans are usually offered on an revolving basis where cash can be accessed as and when needed.
- Private Funding
Private funding often doesn’t have the same strict criteria as traditional lenders in providing commercial loans. They are far more flexible and will take into account the profitability of your business, accounts receivable, potential for growth and many other factors in providing the financing your business needs to stay in operation and to keep growing and expanding regardless of your credit score.
Private funding provides for the varying financial requirements of businesses that have different financial requirements. Instead of simply providing a traditional commercial loan, they offer a range of products that are tailored to meet the specific or comprehensive needs of different types of businesses.
Neal Business Funding offers the following finance and credit solutions that may suit the needs of your business.
- Small Business Loans for startups or existing enterprises to meet just about any of the needs of a small business.
- Franchise Loans to purchase a franchise and see to the cost of day-to-day operations.
- Unsecured Business Lines of Credit that provides a revolving line of credit for your business.
- Accounts Receivable Financing to provide you with a loan relative to the value of your invoices.
- Stated Income Loans to purchase real estate based on the value of the property.
- Purchase Order Financing to purchase presold goods to meet the ongoing needs of your customers or clients.
- Merchant Cash Advance that provides you with the cash that your business needs and uses a percentage of future credit card transactions to repay the loan.
- Consumer Financing to offer greater value to your customers.
- Equipment Financing to purchase equipment to meet the operational needs of your business.
- Healthcare Financing suited to the ongoing financial needs of medical practices.
- Commercial Real Estate Financing to fund the purchase of a property for your business.
- Fix and Flip Financing to finance a property renovation project with the aim of selling the property for profit.
If you cannot find a financial product or a commercial loan with bad credit that suits the current, long-term or ongoing needs of your business. It is a simple matter of contacting your private financial provider in order to find out more about how they can tailor their solutions to better meet the unique needs of your business. Most of the products on offer do not require a perfect credit score in order for your business to qualify for the type of financing it needs or for funding to be granted.
