You may believe that it is impossible to start up a business if you have either a poor personal or business credit score. However, this is not the case, and there are many solutions that you can use to combat and improve your poor credit score and the potential of being able to start up a business.
Take out a Personal Loan
Although your personal credit score and business credit score is different and will be looked at separately by lenders, your personal credit score can affect the likelihood of achieving success when it comes to getting a business loan. Additionally, you may need a personal loan to combat the effects of starting up a business. Personal credit scores can be affected by missed repayments and extensive credit applications. Therefore, by taking out a personal loan and repaying this on time, not only will you be able to keep your head above water, but this will be reflected in your credit score. Bad credit loans, such as from Cash Lady allows you to make online applications regardless of your credit score, matching you with lenders who are willing to give you a short-term loan.
Start a Business Credit Card
Setting up a business credit card and proving that you can repay the money that you spend on this can help to build up your credit rating as well. By repaying the monthly bill, you will be showing that you have your business finances under control and that you can pay the money back efficiently.
Use Your Business as Collateral
Although using your business as collateral does carry some risks if you are unable to pay back your loan, using your business as collateral has many excellent benefits, including assuring lenders that they will not be at a loss if you are unable to pay back your loan. This gives them the reassurance they need to know that they can make a profit even if you struggle to return their money, and so they will be more likely to accept.
Have a Business Plan
Being able to present a viable business plan, along with projected growth and profits, is a useful tool when applying for business loans. By showing the bank or lenders that you are completely confident that you know roughly how much money you will be making and how soon you will be able to pay back your loan, they will be more certain the give the loan to you.
Grants are an accessible and viable way for businesses with little cash foundations for their start-up. These grants can be provided by the government and other bodies, and all you need to do is apply for these with a viable business plan that they can trust will be successful. You will not have to pay these back and yet will benefit from the instant growth afforded your business, without the worries of repayment.