WANT TO IMPROVE YOUR BUSINESS CREDIT & FUNDABILITY?
Subscribe to Our
Weekly Email Newsletter to Get Actionable Credit Building & Financing Info
We Respect Your Privacy
Published By Faith Stewart at October 15th, 2018
As a new business, you likely have no business credit. If you didn’t already know, zero business credit is equal to bad credit. This means when you are trying to get up and going, you are going to need start up business loans for bad credit. Guaranteed this will be a hard sell.
The start up phase of a business is often the most difficult. There are a huge number of challenges that you have to meet during this phase. Often funding is the greatest of these.
No traditional lender wants to lend money to a high-risk borrower, and that is what you are if you have bad credit.
That is why it is time to break with tradition. Do something different. Take a risk. Find non-traditional lenders and ways of funding that will work despite your credit. This is where start up business loans for bad credit guaranteed or not, can be helpful.
They are not the only options, however. You can look into crowdfunding, angel investors, venture capital, self-funding options, and even gifts from friends and family. There is a lot more available today due to the explosion of online lending and investing sites.
Of course, all the information in the news about these lenders makes them sound pretty bad. In reality, some of them are not great. Others however, are not as bad as they sound. They may have higher interest rates and more strict repayment terms, but there is a reason for that.
Lenders use higher interest to help reduce their risk, since they are lending to those with less favorable credit scores. Some non-traditional lenders offer loans that are totally legitimate, interest that is higher but fair, and they disclose all of the information that they should.
With the right lender, these type of loans are not necessarily a bad thing, as long as you handle them responsibly.
Breaking from tradition can be scary. It is kind of like jumping off a cliff. But don’t let the hype make you back down. You can find the funding you need in places you probably have not considered.
This is because we believe we have to have a certain credit score to be successful. The truth however, is that everyone has to start somewhere.
In starting a business, everyone begins at zero. There is no credit score before there is a business. If your personal credit score is okay, you can do a lot on the wings of that.
If you don’t have a great personal score and your business score is non-existent, you need to look for other options. Start up business loans for bad credit guaranteed by assets, the government, or a co-signer, will likely be your first stop.
If you find this is not an option for you, then there are other types of start up loans for bad credit, guaranteed to not require security. This is where the really non-traditional lenders step up and wave you over.
As with anything out of the ordinary, you are going to have those that tell you non-traditional lenders are not safe. They will quote high interest rates and tough payment terms. There will be discussions about how they suck you in to a vicious cycle of debt that you cannot escape.
This can certainly happen. It can happen with any debt. But high interest rates and harsh repayment terms do make for a slippery slope. The thing of it is, sometimes the only options you have are to do the hard thing or give up.
If you prepare mentally and have the proper safety nets in place, there is no need to give up just because start up business loans for bad credit guaranteed harder, are scary.
First, do your research. You will find that many of these funding sources are not as scary as you might think. In fact, some of them reduce risk in creative ways that work to the advantage of both the lender and the borrower.
Next, get your head in the game. You need to know your limits when it comes to repayment. If you end up with financing rather than funding through another source, you are going to have to repay. You will not be able to do that if you over extend.
This means you are going to need budgets and forecasts in place. A lot of it will be a guessing game if you are not in business yet, but that is part of the risk. You need to make a reasonable estimate of what you can handle.
Taking risks is a good thing, but jumping out of a plane without a parachute is not.
Once you have an idea what is available and what you can manage, start your search for start up business loans for bad credit. Guaranteed is not a word to describe this search, but it is highly likely you will find something that will work.
There are so many options it is impossible to list them all. That is why diligent research is so important. However, we can get you started.
This is a huge win in the start up business loans for bad credit, guaranteed or not, category. It is an amazing program with few that come close. Basically, Kiva is free. You have to repay it, but there is no interest.
The only requirement is that you lend $25 to another company on the platform and recruit part of the funds from your own network of family and friends. You also have to submit a lot of paperwork, including a thorough business plan, but hey, isn’t it worth it for free money?
There are multiple crowdfunding platforms available these days, all with varying requirements. These are not classified as start up business loans for bad credit guaranteed, because this is not a loan. There is no repayment.
Crowdfunding is a way of allowing the general public to invest small amounts in your company. Usually they do so in exchange for some incentive. This may be a free product or something else. The rewards may vary depending on the level of investment.
It isn’t a loan however, because there is no pay back required.
The most well know crowdfunding platforms include Kickstarter and Indiegogo. They differ in a few ways, but the most prominent differences relate to when you receive the funds. With Kickstarter, you will have to set a fundraising goal.
And you do not receive any funds until you reach that goal. If you never reach the goal, then you never see the money.
With Indiegogo you can choose whether you want to wait until you reach your goal or take the funds as they come.
This is where companies or individuals invest in small start ups. These are less formal than capital investors, and the amounts offered are usually smaller. They can do the trick though, and may be just what you need to get you over the funding hump.
The best part? Though technically not start up business loans for bad credit, guaranteed you do not have to worry about credit because you do not pay investor fund back.
For very small start ups, the most common form of venture capital comes from angel investors. These are high net worth individuals that are willing to invest. The appeal of angel investors is that they are informal. Literally anyone, even your mom, can be an angel investor.
You just have to find someone that wants in and has the money.
I am sure that you are thinking to yourself that if this was a possibility, you would not be reading this article. A lot of people do not realize the many options there are when it comes to this. The most often overlooked option for self-funding is a loan from a retirement plan.
If you have a retirement account from a previous job, you can likely take a loan from it.
It doesn’t require a credit check typically because it is your own money. And when you pay it back, plus interest,then you are just repaying yourself. This could be a start up business loan for bad credit, guaranteed in the truest sense.
Once you have your funding and you have landed safely on your feet, it is time to start tackling that credit monster. The first step is to establish it. Establishing separate business credit is a process that begins during the start up phase.
f you skipped any of the stepping stones to establishing business credit, there is no time like the present to get started.
Incorporate your business or begin operating under a DBA. It sounds simple, but your business has to be identifiable as an entity separate from you. There are plenty of benefits to incorporating and several ways to do it, but for the purpose of establishing business credit a DBA will suffice.
While it is less formal than incorporation, obtaining a DBA still needs to be handled through the IRS. You can’t just make up a business name and go with it. It has to be registered as a DBA.
Obtain a separate phone number for the business and list it in the directory under the business name. It should be an 800 number or some other toll free options. A fax number is important also.
Open a business bank account and use it for all business transactions.
Get a D-U-N-S number from Dun & Bradstreet.
This is how you get started. All of your hard work to build credit will be fruitless if your business isn’t recognized as a separate entity.
This is the part that can feel slightly anticlimactic. You were brave and took the risk. Finding start up business loans for bad credit, guaranteed to be stressful, really gets the blood pumping.
Once you land safely on your feed and can see your business growing, it is time to start building business credit.
It is a process that is slow and steady if you just keep moving forward. Do business with vendors that report to the credit bureaus. Ask utility companies to report on time payments. Then, pay your bills. It is that simple.
If you make consistent, on-time payments that creditors report to the credit agencies, your business credit will grow.
Some popular starter vendors include:
This power tools and hardware vendor actually sells a wide variety of supplies, and they can take care of auto fleet maintenance as well. Grainger sells power tools, pumps, hardware and other things. In addition, they can handle maintenance of your auto fleet.
You need a business license and EIN number to quality, as well as a DUNS number from Dun & Bradstreet to get started with them.
Apply over the phone or by fax. You will need a business license only if you need less than $1,000 in business credit, but if you need more than that you will need trade and bank references as well.
Check out starter vendor Marathon. Marathon Petroleum Company provides transportation fuels, asphalt, and specialty products throughout the United States. Their comprehensive product line supports commercial, industrial, and retail operations. This card reports to Dun & Bradstreet, Experian, and Equifax. Before applying for multiple accounts with WEX Fleet cards, make sure to have enough time in between applying so they don’t red-flag your account for fraud.
To qualify, you need:
• Entity in good standing with Secretary of State
• EIN number with IRS
• Business address- matching everywhere.
• D-U-N-S number
• Business License- if applicable
• Business Bank account
• Business phone number listed on 411
Your SSN is required for informational purposes. If concerned they will pull your personal credit talk to their credit department before applying. You can give a $500 deposit instead of using a personal guarantee, if in business less than a year. Apply online. Terms are Net 15.
Uline reports to Dun & Bradstreet also. They carry shipping boxes, trucks, dollies, janitorial supplies, and more. In addition to a DUNS number, they will also ask you for a bank reference and two other references.
You may need to prepay at first, but after that they are likely to approve you for Net 30 terms.
With a good business credit score, you will be able to do so much more in the future, including finding financing to grow and expand your business.
While using start up business loans for bad credit guaranteed is never something to take lightly, it is almost always worth the risk. Anything worth having generally includes some level of risk.
If you want to run your own business, if you want to make your dreams come true, you have to fight for it. Don’t let the fear of your bad credit hold you back.
Find a way around the fear and take your dreams into your own hands. You can make them come true. Discover this new way to get start up business loans for bad credit, guaranteed.