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 crucial when you need additional working capital, and are considering getting 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:
Create a Solid 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 prepared to reveal your monthly sales and hopefully any 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.Remember that improving your score can't be done overnight.You have to form good financial habits and let the credit bureaus see for themselves over time.If you're not in a hurry to get financing, then focus on boosting your score, and then go apply.
Get a Merchant Cash Advance
Similar to a loan, a merchant cash advance is a type of business financing, but it is an altogether different product.With a cash advance, you get lump sum financing which you repay by giving your provider a certain percentage of your personal credit card sales.Thus, even with a poor credit score, consistent credit card sales can still qualify you for this product. Learn more about small business funding or get the best revenue based lenders.
Handle Your Bills Well
Late bills payment can pull down your credit score, so avoid this completely moving forward.Here are a few ways to help you ensure that your bills are always paid on-time:
Create a monthly calendar reminder: If you always forget to meet bill deadlines, get a calendar with a notification feature so you will be reminded as your due date draws near.
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.