Most business owners struggling to overcome poor credit have a notoriously hard time qualifying for the financing they need to grow their businesses. In fact, just 10 years ago, these entrepreneurs might not have had any small business financing options on the table.
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| Sam Solakyan |
What are the best loan options for entrepreneurs with bad credit? Here are your three top options.
1. Short-term loans
If you're looking for bad credit business loans that come with a structure you're familiar with, short-term loans might fit the bill.
Short-term loans are structured like the traditional term loans you know well: You receive a lump sum loan that you'll pay back with fixed payments over a predetermined amount of time. They're almost exactly like what traditional bank lenders offer -- with a few key differences.
First,, these loans are, well, short. Instead of being offered over a multi-year period, these loans have terms lasting anywhere from just three to 18 months. And because they come with such short terms, they're most often paid back with daily or weekly repayments instead of a typical bank loan's monthly repayments.
Short-term loans also have lower limits (ranging anywhere from $2,500 to $250,000), meaning that the borrower's payments will be proportionally less than what you'd be responsible for with a bank loan.
Fortunately, it doesn't take much time or effort to apply for a short-term loan. They often have simple applications and a short waiting time to funding, so if you need quick cash to act on an important business decision, a short-term loan can be a great fit.
Further, short-term loans are at the top of the list for the best loans for bad credit, as these lenders typically work with borrowers with a minimum FICO score of 550. Thanks to the loan's short-term and frequent payments, lenders can take on more risk when it comes to choosing whom to work with.
If you're looking for bad credit business loans that come with a structure you're familiar with, short-term loans might fit the bill.
Short-term loans are structured like the traditional term loans you know well: You receive a lump sum loan that you'll pay back with fixed payments over a predetermined amount of time. They're almost exactly like what traditional bank lenders offer -- with a few key differences.
First,, these loans are, well, short. Instead of being offered over a multi-year period, these loans have terms lasting anywhere from just three to 18 months. And because they come with such short terms, they're most often paid back with daily or weekly repayments instead of a typical bank loan's monthly repayments.
Short-term loans also have lower limits (ranging anywhere from $2,500 to $250,000), meaning that the borrower's payments will be proportionally less than what you'd be responsible for with a bank loan.
Fortunately, it doesn't take much time or effort to apply for a short-term loan. They often have simple applications and a short waiting time to funding, so if you need quick cash to act on an important business decision, a short-term loan can be a great fit.
Further, short-term loans are at the top of the list for the best loans for bad credit, as these lenders typically work with borrowers with a minimum FICO score of 550. Thanks to the loan's short-term and frequent payments, lenders can take on more risk when it comes to choosing whom to work with.
Sam Solakyan is an Entrepreneur, Philanthropist, CEO and Founder of S3 Capital, Inc. – a private equity firm with a focus on helping business owners overcome barriers on their path to success. Aside from his commitment to developing thriving businesses, Mr. Solakyan is driven by an unparalleled dedication to his community. Add a graduate of George Washington University School of Business Mr. Solakyan’s success in the workplace and in the community is the result of his dedication to a long-term vision and hard work.
So, if you're looking for a predictable and straightforward small business loan with your bad credit, a short-term loan could be for you.
So, if you're looking for a predictable and straightforward small business loan with your bad credit, a short-term loan could be for you.
For More Information:- Jared Hecht
