Do you have bad credit? That should be a wake-up call. In many ways, bad credit is a life lesson: things don’t always go your way. And credit problems are certainly a fact of life for many small businesses. Bad credit will not help you get small business loans. But analyzing why you have financial problems will help you in the future.
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Chronic cash flow problems affect many types of small businesses. But nobody understands the difficulties better than medical professionals. Most of the work you perform for patients is billed out to a third party. Insurance providers. Medicare. It can take weeks – often months – before you see reimbursements. Meanwhile, you still have to pay your monthly expenses. Medical practice business loans can smooth chronic cash shortages.
In a recent article I talked about bad credit small business loans for women. In the past, women entrepreneurs have often been short-changed when it came to business loans. Especially if your business had bad credit. But thankfully, times have changed. So in that article, I tried to put the negatives to rest. And focus on the positive — bad credit doesn’t mean no credit. Even if you’re a woman.
You may think your business can’t get a loan because you have bad credit. You may think the fact that you’re a woman makes things even worse. You’re not entirely wrong, on either count. But you’re not entirely correct, either. Woman entrepreneurs can get small business loans, even if you have credit problems.
Now that 2017 is already weeks old, and Father Time has gone back to bed for his long winter nap, most small business owners have already begun working on their books for the New Year ahead. Being profitable and cutting costs are probably on the list of resolutions for small business owners, along with offering better services to customers. But what needs to be on the top of every small business owner’s to-do list is fixing any bad credit issues that may be present.
Did you just do a double-take when you read the title of this blog? What?! You mean I can actually use my bad credit to get a small business loan?
Well, not exactly. But you can get a business loan despite your credit problems. It takes money to keep your business going. And, frankly, a lot of small businesses find themselves in a bad credit situation. According to AllBusiness.com, “There are a lot of reasons why a small business might be deemed uncreditworthy. They run the gamut from slow sales to poor collections to late payments to bad personal credit.”
Is your business deep in debt? If so, you may be considering additional small business loans for debt consolidation. By now you probably have bad credit, too. I know this is a disheartening situation. You’ve worked so hard to grow your business. You have dreams! But your finances are a mess. Can you even hang on?
The nation’s economy has improved a great deal since the Great Recession. By now, your restaurant may be flourishing again. A small business loan could be just what you need to keep growing.
But like many small businesses, you are still haunted by the economic downturn. According to business credit expert Marco Carbajo, “Today, restaurant owners can’t get the business loans they need due to bad credit they incurred from the past.” He says, other contributing factors can be “excessive debt, lack of collateral, and an arduous approval process.”
No doubt you’ve heard the expression, “money makes the world go round.” This is certainly true for small businesses. Managing your money well is critical for success. You can use small business loans to help do that. But that’s just one tool. As a small business owner, you need to understand the ins and outs of business credit.
Credit is credit, right? Not so fast. A big misunderstanding that many small business owners have is assuming that their personal credit is the same as their business credit. In fact, these two factors are very different and can impact an individual’s financial future in multiple ways. Assuming that a negative personal credit score will make it impossible to get small business loans is just one of the misconceptions people have regarding business vs. personal credit.