Whether you need short-term or long-term funding for your business operations, your credit score will be an essential part of loan requirements, limiting firms with low scores. Fortunately, alternative lending options bridge this gap, providing multiple financing options. Below are some viable options for a business loan with bad credit.
Short Term Loan
Short-term loans will be ideal if you need help financing short-term projects or expenses. Once approved, your business receives a lump sum amount, after which you will be required to pay the loan over the determined duration. This loan comes with flexible terms, allowing you to plan your payment based on your usage of the funds.
Merchant Cash Advances
Merchant cash advances will be another option to look into if you need a business loan with bad credit. Your lender advances the predetermined loan, which is then paid back by deducting a specified portion of your sales. This percentage will be based on your cash flow and previous sales, with the likely candidates for this type of loan being companies with a proven history of large sales transactions.
Equipment Financing
Equipment financing typically provides funding for purchasing equipment and machinery for everyday business operations. This type of loan utilizes the purchased equipment as collateral, providing borrowers with a flexible business loan with bad credit.
Invoice Factoring
Businesses looking for a business loan with bad credit can also utilize their invoices to get funding through invoice factoring. This option allows you to sell your unpaid invoices at a discounted rate in exchange for cash. The burden of payment collection transfers to the factoring company, eliminating follow-up duties. The invoices often work as collateral, fast-tracking the approval and loan disbursement process.
Line of Credit
This funding option allows you to withdraw a defined amount of money for use when needed. You can repay the loan later, with the only downside to a line of credit being that it comes with a limit. A line of credit will be useful when you need funds for emergencies, cash flow gaps and working capital needs.
Contact Private Client Capital Partners today if you need help getting a business loan with bad credit and would benefit from any of the above alternative lending options. Our funding options are underwritten with specific business needs in mind.