Starting a business can be challenging when you have a great credit performance. If you however have a bad credit performance or poor credit scores, the challenge can be exponentially bigger.
Why? Well, a bad credit performance can lead to multiple issues, some of which may include:
- Difficulty in finding funding options
- Create supply and utility problems
- Negate options of credit facilities from good suppliers and service providers
- Increase real estate rentals or reduce the number of options available to you
- In some situations, bad credit may just be the reason you may not be able to start your business at all
Here, we discuss some practical tips that may help you start a business while you suffer from bad credit scores.
Verify Your Credit Reports
One of the first things you should do is to verify how authentic and complete your credit reports are. It is not always the case that your credit reports are flawless. Sometimes, one or more wrong or missed entries do feature and these may be enough to solve certain credit problems you face.
If there are any such issues, you can write to the respective authority and supply evidence for your case. Typically, such issues get resolved in a few days’ time.
Consider Credit Counselling
Improving one’s credit performance and healing bad credit scores can open a lot of doors and in some situations, be an almost invaluable decision towards your business health. Although good credit counselling may get expensive and working towards healing bad credit scores may be even more so, it might all just be worth the expenditure.
Formulate a Business Plan
When you suffer from a bad credit performance, any business plan made should be designed being mindful of this. This may require you to find those rental options, utility options, suppliers, funding services, etc. that accept working with individual business owners with bad credit scores.
Since many of the best options may not be available to you, you might just have to start with what’s available to you and then either keep your business finances absolutely separated from your personal finances or work strategically towards improving your credit score.
Establish an Initial Source of Funding
No matter what your credit performance may be like, you are going to need a source of funds to start your business. Since most loan options for start-ups and new businesses may not be available to bad credit borrowers, the typical funding options available would include:
- Personal savings
- Borrowing money from friends or family
- Crowd funding
- Loans against assets
Identify Valuable Assets
In many cases, until a business is operational and established to an extent, loans secured against assets may be the only option available to bad credit borrowers. For being able to secure such a loan, business owners would have to identify valuable assets and ascertain their values. This task can be a part of the business planning stage and it can in fact impact the business plan to a great extent in certain situations.
Consider Easy Alternative Business Loans
Once your business is established to an extent, you may qualify for a loan from an alternative business lender. At Business Capital USA, we make business loans easily accessible to borrowers whose business has at least 6 months in operation with a steady monthly cash flow or at least $5000 in monthly revenue. Qualifying for our loans does not depend upon your credit history or scores, so even with a poor credit score, you can apply for the loan as long as your business meets the qualification requirements.
Apply for a Loan with Business Capital USA
We have made the loan application process lean and simple, so that your business can benefit from a quick and convenient funding option. Just filling in the online loan application and submitting the necessary details, shall help us understand the basics of your business and get in touch with you, to work towards a suitable loan offer for you.