In this post COVID-19 economy, funding has become a huge issue for businesses. If you have bad credit, it may seem hopeless. Can you get bad credit recession startup business loans? Probably not, but there is hope. There are other options.
Bad Credit Recession Startup Business Loans: Do They Really Exist?
This is a question for the ages. Everyone had heard of them, these elusive loans that anyone can get, even with bad credit. Are they for real? Do they exist? Are they a hoax straight from Bigfoot’s mouth, or are the same as the stories of golden cities in the jungle and fountains that make you forever young? The answer is not as simple as you might think. It is pretty gray actually. But bad credit startup business loans with guaranteed approval are maybe a misnomer.
In the strictest sense, no, they do not exist. This is because there are no guarantees, ever. There are so many variables that go into the term “guarantee.”
That doesn’t mean you should lose all hope however. There are some loans available to those with bad credit. You just can’t say that there is a guarantee of approval because in most cases, there is other criteria a business must meet to eligible if credit is bad.
Bad Credit Recession Startup Business Loans: Why Does Credit Even Matter?
Startups are a big risk, and few lenders are willing to take such risks, especially during a recession. Lenders check credit to help determine whether or not a borrower is likely to repay the loan. It is an effort to reduce risk. Like anything else, overuse can render it useless. Credit is a good indicator, but it is not a perfect indicator, of a likelihood to repay.
Bad Credit Recession Startup Business Loans: What Else Can They Look At?
There are a ton of potential borrowers out there that could be great for lenders. Unfortunately, they will never get a second look because of a poor credit score. They may be excellent bill payers that hit a rough patch in the past.
Those lenders then that offer bad credit recession startup business loans look at other factors. They may peruse credit, but they look at income, current debt, and length of time in business as well.
With some bad credit startup loans, guaranteed approval comes with length of time in business and annual revenue. It is important to remember that startup can be as young as a couple of years. It does not have to be a brand new business to qualify as a startup.
Most loans that do not require a great credit score require at least 6 months in business. Some will go with 3 months. Few and far between are the loans that do not have a minimum time in business requirement. But they do exist.
Some lenders will get as personal as to ask what happened with the credit score. If there is a personal situation that caused a decline in credit, letting them know may help. Also, if you are still low but have increased your score significantly, bringing that to their attention may work in your favor.
Say you are asked why your score is so low, and your answer is that you had a health issue that caused you struggle with on time payments. If you can show them that in the time since your issue became a non-issue you have been able to increase your score by 100 points and it is still rising, the lender may take that into consideration.
Bad Credit Recession Startup Business Loans: Are These Lenders Mythical, or Simply a Mystery?
Bad credit startup business loans, guaranteed approval or otherwise, are hard to come by. The whole search is similar to that of a large hairy creature with big feet or the jungle for a city of gold. There is no shortage of claims that they have been found. When it gets down to the nitty gritty however, that is not what they found. Most likely, they have found one of these next options. Still impressive, but not what others claim they are.
Alternative lenders carry the closest product probably. Most of them are more similar to a very ancient city, but not one made of gold. These lenders are alternatives to the standard banks and credit unions. Many operate solely online. They often process applications in just a few days, and borrowers receive funds quickly.
The main difference is that there are many occasions where they may not even do a credit check. It is quite often that you simply must show that you are generating sufficient revenue to repay the loan and interest.
You do have to do your research still. Do not assume every loan an alternative lender offers is what you are looking for.
The interest rates with alternative lenders are generally higher, and the repayment terms are less liberal. They may also require a personal guarantee or collateral of some sort.
Despite the often less favorable interest rates and terms, these are a great option for those looking for bad credit startup business loans guaranteed approval.
Crowdfunding is not technically a loan, though some crowdfunding sites offer a lending option. These are more in line with investments. This means you do not have to pay them back. As far as bad credit startup business loans, guaranteed approval is not technically possible here.
The reason is that you must set a goal for the amount of investment you want. With some sites, if you do not reach that amount, you do not get your funds. Other crowdfunding sites are more flexible, allowing you to take whatever you can get.
The main reason this doesn’t technically fall into the category of bad credit business loans is that they majority product is not a loan. You do have to provide in depth information however, and most sites require you to offer backers a reward for their investment.
Again, this isn’t a loan, but it is an option if credit is problem. Though not technically bad credit startup business loans guaranteed approval, they are a bad credit startup funding option. The idea is very similar to that of crowdfunding, except you replace the crowd with one investor. Sometimes it is two or three investors. It is a few, and not a crowd, that provide the bulk of the funding.
It’s important to note that angel investing in your endeavor can be really informal. Even your mother can be an angel investor.
If you have been in business long enough to have open invoices, invoice factoring could be an option. The option could qualify as bad credit startup business loans, guaranteed approval with open invoices. The lender is not concerned with your credit, because they will not be collecting from you.
They will pay you a discounted value for your open invoices and then attempt to collect the full amount from your customers. This is an excellent funding option, but truly doesn’t truly operate like a true loan.
Merchant Cash Advance
This works similar to invoice factoring, but it isn’t exactly the same. You do have to be generating sufficient credit card sales to qualify. However, they are not interested in your credit because they will collect from your credit card sales automatically.
Here is how it works. The lender determines an amount you are eligible for based on your average daily credit card sales. They then lend you the money, and collect repayment as a percentage of daily credit card sales. Most often, this happens automatically, electronically.
So, though not actually bad credit startup business loans, guaranteed approval is possible if you have the required credit card sales. It is a funding option that works for many.
Self-Funding and Friends and Family
Your friends and family are often your best source for bad credit startup business loans, guaranteed approval because they love you. If they believe in your cause and have the funds, they may be willing despite bad credit. They may also be more flexible and generous in terms of interest rates and repayment terms. It never hurts to ask.
If you have savings or retirement funds available, there is no doubt you will have guaranteed approval with what’s called securities-based financing. An added bonus is that you can repay yourself, and if you choose to do so with interest, even a little, you could end up better off. If you need to take it more slowly, you can do that too. You can be as flexible as you want with yourself.
Avoid the Search
If you are weary of searching for mythical creatures, start now working to establish and build business credit. Many times, this is an issue for the simple reason that business owners do not understand business credit and personal credit are not one and the same.
By working to establish a credit score for your business separate from your own, you make it easier to fund your business endeavors in the future.
The First Step
If you do not currently have business credit and need to get it established, there are some simple steps you can take to get started.
- Incorporate your business
- Get your business its own phone number and address
- List this information under your business name in all the directories.
These steps establish your business as its own entity separate from you and your finances. This is the essential first step to establishing business credit.
Build Legendary Business Credit
This should be the ultimate goal. Once your business its own entity, you can work on building, or repairing, bad credit. When that part is complete, you no longer have to worry about bad credit startup business loans, guaranteed approval or otherwise. You will just be able to apply for a loan and negotiate for the best terms and rates.
How do you get there? First, make sure you are doing business with vendors that report to the credit agencies. Then, get whatever credit you are eligible for. Whether it is a bad credit startup business loan guaranteed approval, or a small business credit card with a low limit.
Even if you don’t need credit at the moment, get something. Then make your payments on time, consistently. This builds a credit score where there was none before, and can begin to repair a poor credit score.
What Makes a Legend?
Remember, legends are not made of nothing but once upon a times and happy endings. There is always an obstacle to overcome. There is always distress of some sort. Don’t let the hard to find bad credit startup business loans, guaranteed approval or those that require a little extra work, be the thing that keeps you from your happy ending.
Either find one of the few in existence, or take advantage of one the alternatives. There is more than one way to win a battle. If the regular weapons are not available for whatever reason, find another way.
The key is to put yourself in a better situation so that once you survive the battle, you can win the war. Then you can go down in history as your own business legendary beast. The Bigfoot of the business world!
Discover this new way to find bad credit startup business loans – guaranteed approval.