Nowadays, bad credit loans can be acquired in a variety of places. Obviously, not from banks, because they always made it clear they want nothing to do with people whose credit score is low.
It can so happen that you’re on the lookout for business loans, but you can’t seem to find someone that’s willing to help you in spite of your bad credit. Where do you go? What are your chances of ever getting them?
Well, don’t despair. There are plenty of sources of bad credit loans, and we’ll show them all to you.
You should consider getting bad credit loans from:
- Web lenders
The Internet has become one of the most frequented sources of bad credit loans. If all else fails, you can always find a good lender online. All it takes is to type “bad credit loans” in Google or whatever search engine you may be using.
Rest assured you’ll find what you’re looking for in the blink of an eye, and that’s not even an exaggeration.
Pro Tip: Learn how to tell frauds apart from genuine lenders.
Micro-lenders are affiliated with non-profit organisations and provide business loans for people with bad credit. Keep in mind that the loans they can offer are not large – hence the “micro”.
If you need a small sum, however, a micro-lender can be the way to go. On top of that, micro-lenders also provide consulting and in some cases even training, therefore you might be able to make your company more profitable in the future.
It goes without saying that if you need a large loan, a micro-lender is definitely not the way to go.
Obviously, this means you must have a relative that is in such a good financial position that he can offer you a loan. This is not as surreal as it sounds, though, so your chances can be pretty high.
Moreover, if you get money from a relative or close friend, you won’t have to jump through as many hoops as you would by borrowing from lenders.
You’ll have to pay it back, of course, but it’s much easier to tailor a good repayment plan that won’t leave you broke at the end of the month.
Factoring, or invoice factoring, to be more precise, is an utterly amazing source of money when you’ve got issues with the cash flow in your business. Unfortunately, not many business owners are familiar with it.
Factoring implies selling your invoices to a factor and getting advance money on them. In other words, you get money on your invoices quicker than you would by collecting them yourself.
This method isn’t really a part of the family of bad credit loans, but it is still used in the same fashion and to the very same end. And here’s another thing: by undertaking factoring, you don’t actually borrow money.
The money you’ll get is yours, it’s only that you get it a lot faster. It’s not a loan. Subsequently, we highly recommend you try factoring if everything else fails. Factoring is one of the safest and most effective ways of getting quick money when you need it most.
Of course, you must have valuable invoices in order to get a decent amount of money. If your company is quite large, that won’t be a problem.
- Private investors
Unlike common lenders that require being paid back sooner or later, private investors can accept shares in your company as a repayment. Be careful, though: you’ll get the money you require, sure, but in the long run, that investor might end up making more profit than you do.
It’s one of the main reasons why the vast majority of business owners get bad credit loans from elsewhere. If your company grows in value and the investor has enough shares, that money you’ve borrowed will cost you a lot.
Make this your last resort. Try out all the aforementioned sources first. It’s not that pleasant a prospect to discover an investor is making so much more money than you do, especially when you’ve poured all your blood, sweat and tears into your company. Be careful with this.
Bad credit loans can be taken from a variety of places. Some of them are more effective and danger-free, others should cause second thoughts. Hopefully, you already know how to stay away from pitfalls.
Having bad credit is no reason to be ashamed. In many cases, it might not even be your fault that it dropped. Banks, however, won’t understand that. And that’s precisely why all these alternative sources of business loans with bad credit exist.