Is your poor credit history stopping you from getting a business loan for your startup? Are you having a tough time gathering fund for your company? If yes, are not alone. There are thousands of budding business owners with this problem. Loan companies are always careful about who gets their loans. They focus on credit scores to safeguard their business. And, if your credit score is poor, you will get a loan with high-interest rates.
Most of the time, applications from people with low credit scores are bound to be rejected.
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With this being said, how will you fund your startup? How can you acquire a good loan at a low-interest rate? Of course, the idea of repairing your credit history and requesting for a loan might sound idealistic. However, this process takes some time. That is why you should look for other ways of getting a business loan with bad credit.
Know thy inner circle
Always look for a loan within your inner circle. Ask your family and friends to suggest loan places. When you have a promising referral, loan companies will be delighted to help you. Approaching loan companies with people who know them is a smart move. Now you will not be judged by your credit system. Instead, you will be judged for your background. As a result, if your business plan is well-established and if your inner circle has reputed members – you will get a business loan for your startup at lower interest rates.
Through your inner circle, you can prove yourself as a trustworthy and responsible borrower.
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When your business loan application gets rejected due to bad credit, switch to an alternative type of loan: the personal loan. Most lenders don’t think twice to offer personal loans to business owners. Almost everyone would qualify for a personal loan.
Before you apply for a personal loan, check if the lender permits using it for your company. If yes, go ahead and apply!
Last but certainly not least, you can venture into crowdfunding. Over the years, so many crowdfunding platforms have appeared. These platforms will help you gather a good amount of money for your startup. The moment you finalize on the idea and come up with a protocol, start gathering the crowd! Platforms like FundRazr and Kickstarter can be used to organize campaigns for your business.