How to Get Business Financing with Bad Credit

  • July 1, 2019
  • By Aidan Dwyer

Many business owners struggle to get enough financing to run their small business – that trouble is amplified when the owner has bad credit. According to FICO, people with credit scores between 300 to 629 are considered to have “bad credit”. Many factors go into determining one’s credit score, and repairing a poor credit score can take years to do. A poor credit score can affect one’s ability to attain working capital for their small business tremendously. It is because borrowers with a low credit score are generally at more high risk in terms of defaulting on a loan. Luckily, there’s hope. There are still options out there for small business owners with low credit. 

Invoice Financing 

If your company uses invoices as a method of receiving payments, you can use invoice financing or invoice factoring to gain working capital for your business. Invoice financing is capital that you can receive on the basis of your business’s accounts receivable. You can get funding of up to 90% of unpaid invoices in as little as 3 days. Invoice financing is not only convenient for business owners who have bad credit scores. But also, for businesses who need funding immediately and cannot wait for outstanding invoices to be paid. After all, your business has already provided the service, it is only fair you get paid.

Cash Advance

Even if you have bad credit, you still may qualify for a merchant cash advance. Here at REIL Capital, we can work with anyone who has a credit score of over 450 to secure business financing. 

A cash advance is the quickest and easiest financing solution for small businesses. Businesses receive a lump sum, usually between 80% – 120% of your monthly revenue. Business people repay this capital by using their daily credit card sales or a fixed remittance from their business bank account. This is the perfect option for businesses that have a large amount of monthly revenue coming in, but don’t necessarily have a good enough credit score to secure a term loan or SBA loan. Cash advances are also very flexible, ranging in funding amount from $10,000 to $500,000 and terms from 4-18 months. A cash advance is also one of the quickest ways to receive capital for your business, with funding in as little as 24 hours. To qualify for a cash advance you need to have been in business for at least 6 months and have at least $8,000 in monthly revenue.

Asset Based Lending 

If you don’t have the best credit score, but your business currently owns a lot of assets. Then, you may be able to qualify for asset based lending. Asset based lending allows businesses to secure financing for their business by using their currently owned assets as collateral for the financing. If your business owns property or equipment worth a considerable amount of money. Then, you can use this property as a down payment on the loan. The property in question needs appraisal. Which can help to secure your business between $50,000- $2,000,000 . Asset based lending can get your business the funding that it needs in as little as 2 weeks. 

At REIL Capital, we are small business owners just like you. We understand how difficult it can be to secure financing, especially with less than stellar credit. Once again, we can help small business owners who have a credit score as low as 450. If you want to see how we can help your business gain working capital, fill out our commitment free application today.

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