Options if You Have Poor Business Credit
When starting a new business, the old phrase “it takes money to make money” couldn’t be truer. As an entrepreneur, you understand the importance presenting the finest version of your product or service the public first. Financing your business can seem like a logical first step in making this a reality. Poor business credit could hinder your chances of opening. Luckily, there are a few options to consider if your business credit isn’t up to par.
Crowd funding is a relatively new way to secure start-up funds for a business. There are many websites that allow entrepreneurs to post descriptions of their ideas and solicit funding from a pool of investors. When you’re looking for crowd funding services, you may want to pick based on your target audience and the amount of funding you need. People are generally more likely to respond to businesses they might use. Also, some sites present projects to a few high-dollar investors, while others use a more open platform where anyone can invest.
Merchant Cash Advance
A merchant cash advance is an option for businesses that are already in operation. This is a cash advance given by your payment processing service. Rather than paying your balance in installments, your service will receive a percentage of each payment processed through your system. You don’t need stellar business credit to receive one of these loans, and the repayment period is usually short-term.
Short term and Term Loans
Another option for start-ups and new businesses is a short-term or term loan. These loans can provide up to $500 thousand dollars. You can make payments daily, weekly or monthly. There are many online services that allow individuals to apply online. The process is often quick, and you can receive your funds within 24 hours. These loans are secured, and repayment periods can last two to five years.
Retirement Savings Loans
A retirement savings loan allows you to borrow money from your 401(k). You pay no interest and you don’t need good business credit. If you have a 401(k), you may consider this type of loan as a safe financing option. You are essentially borrowing from yourself. Work with professionals to avoid early withdrawal penalties and know the risks associated with failed repayment.
If your business credit isn’t as perfect as you’d like, you still have a quite a few business financing options. If your business is new, consider crowd-funding. Short-term loans, term loans, merchant cash advances and retirement savings loans are also viable options.