When you’re a business owner, there are lots of things that you need to take on board and manage. Finances are one of the most important as they can determine your growth and success. However, to access additional funding through lenders, you’ll need to pay close attention to your credit score. A lot of lenders will require you to have a good score in order to be eligible for approval. But there are ways that you can still access funding that you need in spite of this. So, keep reading and find out if bad credit really means the end for you and your business…
Bad Credit Loans
Just because you have a bad credit score, doesn’t mean you can’t access business funding. In fact, there are lenders that specialise in this sort of borrowing, and they offer loans for bad credit. They might take a look at your personal credit score instead of your business one and make an assessment based on that, or they may offer you a higher interest rate if your business credit is low. Although a higher interest rate means you’ll be paying back more in the long run, it helps lenders make you less of a risk to lend to. This is because if you’re able to afford their higher interest rates, then it shows to them that regardless of your bad credit, you’re able to meet the repayments each month. So, while you may not be able to receive a regular business loan, there are ways you can still receive finance from certain accredited lenders.
Boost Your Score
If you want to make it so that your bad credit doesn’t hold you back from being approved when applying for finance, you might want to think about boosting your score. There are lots of ways you can do this, but it will take time and effort on your part. For example, always paying your bills on time and ensuring that you have enough money for them to come out each month will go a long way. It’s also important that if you have business credit cards or overdrafts that you don’t max them out and take ages paying them off. You may also want to take a look at your personal finances too, as if they’re not up to par, it could impact your business one too. When you apply for financial support, you need to be careful not to over apply as well. Each time a hard credit check is ran; it leaves a dent on your report. So, if you then apply for lots of different funding, you’ll end up with all these credit checks littered over your business credit rating. While it’s not the worst thing in the world, it can still look bad to potential lenders, as it shows them that you have a hard time being approved elsewhere. So, if your business credit score is bad, try to work on increasing it, and you should be able to see an improvement over time.
As you can see, having a bad credit score for your business doesn’t have to mean that it’s curtains for you. In actual fact, there are still ways that you can access the financing that you need without having to do anything to your score. However, you can apply for regular lenders instead of bad credit loans once you work on improving your score. So, if you’ve got bad business credit, don’t worry! You can still see the growth that you need to succeed and even receive funding while you’re at it!
