Can You Get A Business Loan With Bad Credit?
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If you’re looking at business loans, you might be wondering if you can get a business loan with and credit. In most cases, a lender will take into account your credit score while viewing your application, especially in the case of a business loan. However, some private lenders are bad credit specialists, meaning that they are willing and able to lend to those with less than perfect credit.
Read on below to find out more about bad credit scores and business loans.
Can my credit history impact my ability to get a business loan?
Depending on how long your business has been operating, a lender may need to review your personal credit history, as well as reviewing your business credit history. In the case of your personal credit history, a lender may check things such as records of your personal bank accounts, credit cards statements, any previous business history, as well as any loan defaults and missed payments on your credit record.
Having a negative credit history can make it challenging to get approval for a business loan. However, a bad credit score does not make getting a business loan impossible. Some lenders offer specialised loans to those with bad credit. Usually, through private lenders, there may be a type of loan that you could apply for with bad credit that will suit your business.
Can you get a business loan with bad credit?
Generally, lenders consider a credit score of 680 or higher to be good, and the higher your credit score is, the more loan options will be available to you. A higher credit score may also help you to get a more competitive interest rate, or depending on your lender, some better loan terms.
If you do happen to have a less than positive credit score, there are still options available to you. You may find that a private lender may be more willing to lend to you if you do have a lower credit score than a bank would. A private lender may be able to get you approved for a loan regardless of your credit score.
What is a bad credit loan?
Bad credit loans are designed for people who have struggled financially in the past. Intended to help people with bad credit, anyone who has any type of bad credit can generally apply for a bad credit loan.
Bad credit loans differ from standard loans in that they are targeted to help those who have experienced bad credit or bankruptcy. Those who have experienced these financial troubles can often find it difficult to be approved for a loan and may find a bad credit loan helpful.
Having bad credit can be caused by a variety of factors, including overdue bills or defaulting on a previous loan payment. By having a poor credit history, some lenders may be less likely to lend to you. Bad credit loans are usually short term and the fixed rate which may provide an opportunity to repair your credit history.
What will I need to apply for a business loan?
Unlike standard loans, a lender may require more documentation for a business loan application. You may need to have the following documents to apply for your loan:
- Personal identification – such as a driver’s licence or a passport to prove your identity
- Business verification – You will need to be able to prove your ownership of the business
- Financial history – Your lender will almost always want to see how strong both your personal and business finances are. They may need to see bank statements, sales records, and other financial documentation before they approve your loan
Depending on your credit score and history, a lender may wish to see more or different forms of documentation before they approve your loan.
What other factors do lenders consider?
Although your credit score is important when you are being considered for a loan, it isn’t the only factor lenders consider. A lender may also consider:
- Profit – Lenders may require you to show that you bring in enough money to afford your repayments and that your business can bring in enough profits to stay afloat
- Time in business – Some lenders may want your business to have a track record of doing business for at least 6 months, although a few years is generally ideal
- Business debts –Lenders may ask about any outstanding debts in your business’s name, such as loans that have been defaulted on, or company credit cards that have overdue bills attached to them
Your lender may take into account other factors depending on their application checklist.
Where does Tiger Finance come in?
With Tiger Finance, we can help to get you a loan in four easy steps. You will have a free consultation with one of our specialists, and we will tailor-make you a loan. We will negotiate with lenders on your behalf before you are approved.
We have helped countless Australians with both good and bad credit ratings to be funded for their business. We understand that lending criteria from other lenders are too strict, and can stop you from achieving your goals. That is wrong, and it should not hold you back.
How we can help
Our finance specialists can help you find the right business loan for your project. Business loans are a complicated topic, but we will find a loan that makes your dream project that much easier.
If you are one of the many Australians finding getting a business loan difficult, Tiger Finance can make the process simple and pain-free. Call our specialist team today for your free consultation.
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