Small businesses are at a higher risk of shutting down if a couple of projects don’t go their way. The amount of financial loss they incur may make the business owners think of shutting down their businesses. But a bad credit business loan can come to their rescue.
Bad credit business loans
Here are a few bad credit business loans that you can take from the lender:
1. Collateralized loan
As the name suggests, you need to keep one of your assets equivalent to the loan you are taking to the lender. The lender will have the right to seize that asset if you can’t repay the loan in time.
2. Short-term business line of credit
This type of loan allows the borrower to access funds up to a specific amount from the lender. The system is similar to that of a credit card, but the lender will charge interest on the amount you borrow here.
3. Short-term small business loan
Sometimes, you lose a significant amount of money on a project, and you don’t have enough money to start another project. In such cases, you can take a short-term small business loan and repay the money with interest once you make a profit.
Best ways to obtain a bad credit business loan
Why would a lender give you a business loan when it already has bad credit? Aren’t your chances grim already? Well, here are a couple of ways you can turn things in your favor.
1. Provide collateral
Lending money involves risk. Even the most qualified borrower may counter an unexpected downturn in his business and lose it all. Therefore, if you want to increase your chances of getting a loan, you should insist on providing collateral. You have two options here:
- Invoice financing – Some lenders may approve your loan if you provide details of the unpaid customer invoices. These invoices act as your loan’s collateral.
- Equipment financing – If you want money to buy a piece of new equipment, you can keep the equipment as collateral. That means if you can’t repay the money, the lender will seize the equipment.
2. Find a co-signer
A co-signer is someone who takes partial responsibility for your business loan. The lender can contact your co-signer if you can’t repay the loan in time.
Q: Are online lenders better than traditional banks for bad credit business loans?
A: Yes, they are. They have faster turnaround times, higher approval rates, provide faster access to funds, have flexible repayment terms, and don’t require a lot of documentation.
If you are searching for a lender who will provide a bad credit business loan, you can get in touch with Blursoft. It has a high loan approval rate and will get back to you with a decision within 24 hours.