There’s a common trait that all entrepreneurs share and that’s the lack of sympathy towards following the “normal path” of life. With this out of the box thinking, entrepreneurs have been able to achieve tremendous feats and have shaped our history throughout the centuries. A person becomes an entrepreneur the moment they decide they will take their life into their own hands by offering a product or service to the marketplace. Then the journey begins and within the first five years, people give up. One of the major reasons is due to a lack of capital and so in this article bad credit loans Tampa will be discussing how you can get a business loan even if you have bad credit.
How to Get a Business Loan as an Entrepreneur With Bad Credit
So what is a business loan and how do you get one if you have bad credit? A business loan is exactly what the name states, a monetary loan given to you by an individual or institution which is to be used for business purposes only. It has certain terms and often require credit checks, income statements, and background checks to make sure you’re not a felon or have misused loans in the past. Because entrepreneurs often don’t have a job and may have failed in the past, resulting in bad credit, it is harder to get a business loan.
Because most applications require credit information, it may be best to not even get a loan but instead seek other ways of attracting the money your business requires. These include but are not limited to the following:
- Business Credit Cards
- Merchant Cash Advances
- Equipment Financing
- Invoice Financing
- Short-Term LOC
- Short-Term Loans
When you open a bank account for your business you will also have the option of opening a business credit account. This is a great option when you’re barely stating out and may have good credit. You can keep the cards even if you’re not using them, simply to build credit so you can take out larger business loans in the future. If you’ve been doing business for a while and have merchants whom you get products from to resale to your customers, they may be able to provide the capital you need to grow because it will help them grow their business as well. This way you have the product ready (on loan) and can repay the merchant(s) once they sell.
If you have expensive equipment you can use these as collateral to prevent credit checks and to assure the lender that if you were to default they could take the equipment. Make sure you have proof of how much the equipment cost and how much it would be worth in the current marketplace. You can also seek short-term lines of credit or loans which are typically paid in six months or a year and though most won’t care much about your credit, you will have to trade that for a higher interest rate and penalties. It may be worth it if you know you will get a great return on investment by using the loan to grow your business.
In conclusion in this article we discussed the topic of business loans and how an entrepreneur can get one or the equivalent of a business loan without putting their credit history and score on the line. You have a few options when it comes to borrowing money, but if you want to be safe from having to repay anyone, the money you need should come from sales of your product or service.
Author Bio: Douglas Pitassi is a small business blogger and freelance writer.