As you must already know, maintaining a north of average credit score is greatly important for those who run a small business. This can be particularly vital when you're looking for additional working capital, and are thinking of applying for a small business loan.With a low credit score, this could be a feat.
The good news is, it's not impossible to get that loan even if you have bad credit, and here are tips to help you do that:
Build an Airtight Business Plan
When you apply for a small business loan having a low credit score, it will be wise to prepare a solid business plan that you can show to your potential lender.This will surely help to prove to them that you can manage repaying a loan.Be willing to divulge your monthly sales and improvements in your business's finances.Even with a less than stellar credit score, a lender may be more likely to work with you if you can show an upward movement on your financial growth trajectory.
Work on Your Credit Score
Begin by checking your business credit report to see and correct any discrepancies.Take note that improving your score will not be achieved in an instant.You have to form good financial habits and let the credit bureaus see for themselves over time. If your need for financing isn't urgent, you should first concentrate on improving your score, and then apply.
Get a Merchant Cash Advance
A merchant cash advance is, like a loan, a type of business financing, but it is an entirely different product.A cash advance is basically lump sum financing that you repay by giving your provider a portion of your personal credit card sales.Therefore, even if your business's credit score is under average, if you have constant credit card sales, you can still be approved for this option. Find equipment financing or apply for the best bad credit business loans.
Be Responsible with Bills Payment
Paying your bills late hurts your credit score, so avoid this totally from hereon.Here are a few ways to help you ensure that your bills are always paid on-time:
Use a monthly calendar with reminder: If you're always forgetting your deadlines, get a calendar that can be programmed to notify you as your due dates come close.
Review your budget: If you're always missing deadlines because of limited cash availability, refine your budget to make sure that all your expenses are paid when they should be.
Get help from apps: There are many financial apps that can help you manage their bills. They are mostly free but you can get more advanced features for a fee. Continue reading more on this here: https://www.huffingtonpost.com/entry/denied-a-small-business-loan-heres-how-you-quickly_us_59bb6069e4b06b71800c382f.