Paving a path to financial sustainability for a newly minted entrepreneur is not an easy endeavor by any means. Launching a startup business in Florida requires a significant investment of capital to fund research and development, equipment, inventory, employee salaries, marketing and unknown variables that come along with growth. It’s not common for an aspiring entrepreneur to possess an adequate amount of personal savings to self-fund startup costs, leaving them with no other choice but to turn to a small business lender.
A problem that some aspiring entrepreneurs face is that they apply for small business loans with bad credit and in turn, end up being rejected. While small business lenders understand that small businesses are going to go through a period where they are without an established track record of positive sales, they want to ensure that any capital issued to an entrepreneur is going to be paid back at some point. Therefore, credit is such an important factor when a small business lender is determining whether to approve a loan application. A bad credit history from an applicant doesn’t necessarily reflect a small business as being investable. Still, there are ways to acquire the needed capital that small business owners need.
Obtain a Credit Partner – Perhaps the simplest way to alleviate the concerns of being approved for a small business loan with bad credit is to find a co-applicant who has a high credit rating. Small business lenders are more likely to award funding to applicants who can show a background of financial stability and a willingness to assume responsibility for paying back a small business loan along with the associated interest fees. Finding a credit partner is a great way to strengthen the likelihood that you will be approved for your loan.
Use a Home Equity Line of Credit – Small business owners who are also homeowners can use their home as a line of credit. Albeit a risky proposition, allowing a small business lender in Florida to take your home as compensation for an unpaid debt is a way to sway lenders into approving a small business loan. However, it is advised to remain cautious in the asking amount, as applicants who acquire capital with home equity as a source of credit are at risk of losing everything. Be sure to take on exactly what you need and make a plan for paying back the loan as quickly as possible.
Apply for a Cash Advance – A cash advance loan can be an ideal source of quick capital for businesses in immediate need of a cash influx. There are pros and cons with applying for a cash advance however, including high interest rates, meaning that you’ll likely end up paying back more than the initial loan in time. Still, for small business owners with bad credit, this line of funding can help as a small business lending company will work with a broader range of credit scores. Fast and Easy Funds for example, will accept credit scores as low as 550 from applicants. A cash advance from a reputable lending institution could serve as the solution for entrepreneurs in need of a short-term business loan.