Obtaining a bad credit business loan may not be so easy. It is almost near impossible to get a loan from a bank with a score of 640 or below. The initial start-up loan is great if you have excellent score, however maintaining, expanding, and overall trade will also require additional funding which can be extremely difficult to obtain with a less than perfect record.
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Many entrepreneurs damage their chances of obtaining additional funding because they neglect to make timely payments on their personal loans. But, there may be a lot more to lending than just banks.
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Separate Personal Finances from Company Dealing: The first thing you want to do is separate your personal finances from your trade to increase your chances of obtaining a loan. Most lending institutions look at both when going over loan applications. In most cases no funding will be available to you with bad personal credit.
Do not use your Social Security Number: Do not apply for business loans using your Social Security number which is connected to your personal account. By doing this your chances of getting a loan will increase significantly.
Obtain a Tax ID number and Legal Identity: Anyone with a bad personal standing will need to build it fast. Obtaining a tax ID and a legal identity for your company will help to establish a new record which is not attached to your Social Security number. This will allow you to build goodwill from vendors and supplier.
Obtain Small Lines of Credit: Build reputation by going to different vendors and suppliers with your new tax ID number. Use these lines to make your reputation. You can also access business credit cards to help build a solid record for future transactions.
Apply for Debt Consolidation: If you have multiple loans, use debt consolidation to help lower monthly payments and interest rates.
Start looking for Funding Sources: Once you have completed the above mentioned, you can start looking for funding sources. Start your search by obtaining a free list of sources that match your company requirements, and then apply for financial assistance. Many entrepreneurs may choose to seek out private lenders, small loan companies, or even family or friends when all else fails. However, the amount of money you will receive by these private sources can sometimes be limited.
You can also obtain these loans through unsecured business loan, and bad credit refinancing. Research all your options then choose what's best for you.
Good Luck!
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