What Are Bad Credit Business Loans?
The term “bad credit business loan” doesn’t refer to a specific type of small business loan with specific terms. In fact, borrowers with bad credit can be approved for several types of business loans. Having poor credit just makes the terms of these business loans slightly different. You may be able to borrow up to the same amount as any other small business loan. But your interest rate might be on the higher side, or you might have to pay off your financing within a shorter time frame.
What makes small business loans with bad credit so advantageous for certain borrowers is that they have at least one additional function. For example, some bad credit business loans can be structured in a way that dramatically improves your credit score with just a few regular payments. Are you primarily looking to pay off the debts that gave you bad credit in the first place? Your terms may allow you to accomplish this before paying off your business loan at a frequency that does not endanger cash flow.
Programs you can get approved for with bad credit:
- Short Term Business Loans
- Merchant Cash Advance (Credit Card Processing Loans)
- Business Line of Credit
- Accounts Receivable Factoring
- Revenue Based Business Loans (Business Cash Advance)
What Do I Need A Bad Credit Business Loan For?
Since there are various types of bad credit business loans, each loan program can serve various purposes. But how you use the money is up to you. Whether you need to catch up on bills, consolidate your business debts, remodel your storefront or market your new release, you can get approved for a small business loan with bad credit.
A merchant cash advance is one of the easiest types of business funding to obtain with bad credit but payments will not improve your credit score. This goes for most types of funding, unless you are paying the bills that are causing your bad personal credit. Your payments will, however, improve your business credit. Better business credit gives you the power to ask for credit extensions from your vendors/suppliers and conserve your cash flow in the process.
Another viable option is a short term business loan, which improves your credit score by making quick payments and keeping your credit utilization low. The funding would replace the credit you would otherwise use to cover expenses and help you pay off your credit card debt. Your payments would likely appear on your business credit report in just three or four months and overshadow poor credit history from the past. Potential business partners & vendors will also want to work with you now that you can boast good personal credit.
Let’s Start Our Partnership Today!
But no matter which type of bad credit business loan you take out with UCS, paying it back in full will most likely make you eligible for better terms and lower rates. Many clients begin their partnership with UCS by quickly paying off short term business loans so they can access a larger small business loan and do more to expand their businesses. Once we see that you are able to pay off debt while running your business, you should have no problem being approved for a second round of funding that will reach your bank account even quicker than your first. Apply now to see how much you qualify for!