Getting a small business loan for people with bad credit is not a simple task. In fact, it is easier to obtain a unsecured personal credit card. Whether your business is a
sole proprietorship, limited liability or a corporation, you will still be required to use your own personal credit background if your company has no established credit history.
There are steps you can take to help you obtain a small business loan with bad credit by separating your own credit history and establishing your company's own credit profile. First, incorporate your business and obtain a EIN number (This will protect your business from your personal creditors). Second, open up a business checking account. Finally, ask a family member, friend or business partner to co-sign. Finally, if you own your own home you may be able to use the equity in the home to obtain a loan for your small business.
There are a few lenders out there that can help you get a business loan with bad credit. One such company called Merchant Advisors claim they can help people with poor credit obtain no collateral business funding. If approved you can get funds deposited in your bank within one business week. They are registered with the Better Business Bureau and there is no application fee to apply. You can find more information on these services offered at their website at http://www.onlinecheck.com or they can be reached by phone by calling (800)870-7622.
Another source of funding is the U.S. Small Business Administration which will back business loans and can help facilitate a loan for you with a third party lender. There are several different types of loans for businesses offered through them which include loans for starting and expanding businesses, disaster recovery loans, export assistance loans, special purpose loans, plus veteran and military community loans which provides financial assistance for veterans and members of the military community who want to establish or expand a small business. For further information on the U.S. Small Business Administration Services please visit their website at http://www.sba.gov/.
Another good source to help you obtain a unsecured bad credit business loan is to apply with prosper.com that accepts credit scores as low as 520.
If you still are not able to get approved for a unsecured small business loan, then ask your local bank if they will issue you a secured business loan to help you establish a credit history in your company's name.
Disclaimer: Although all information has been written in good faith and reviewed, please email us at firstname.lastname@example.org to report any inaccuracies. We would also appreciate any other lenders that approve applicants for business loans with derogatory credit.