Bad Credit Business Loans

One of the biggest problems facing business today is the lack of bank financing.

Even businesses with good credit are finding it nearly impossible to meet day to day expenses because they can’t get traditional bank financing. Businesses with bad credit are being forced to close their doors because banks aren’t even talking to them.

Several sources for bad credit business loans

Fortunately there are alternative sources of loans for businesses with bad credit out there. The key to finding these alternatives is to look beyond traditional banks and to seek out alternative sources of financing.

The first financing option that businesses should investigate is private lending or hard money. Hard money lenders are private companies, investors or groups of investors that loan money directly to businesses. Since these entities are not banks they are not covered by banking regulations and don’t need to meet the same requirements banks do when they lend money.

A hard money lender might be willing to give a business that is making money but has bad credit a loan based on receipts or a balance sheet. A hard money lender might also be willing to accept equipment or inventory as collateral for a bad credit business loan. Some hard money lenders might even willing to accept accounts receivables as collateral for a loan.

Search for bad credit business loans online

It's fairly easy to locate hard money and private lenders by going online. Simply type hard money lender or private lender into a search engine. Listings for many lenders should pop up and give you alternatives.

Another good source of bad credit business loans that many businesses neglect is their suppliers. Your suppliers want to keep your business so they might willing to extend credit. If your business needs a loan call your suppliers and explain the situation to them. A business with a good record of paying its past bills might be able to get a loan or inventory on credit.

Angel investors

There are also angel investors, angel investors are private individuals and companies who invest directly in businesses. There might be wealthy individuals in your area who might invest in your businesses or guarantee a bad credit business loan for you.

Good places to meet potential angel investors is at groups like the Chamber of Commerce or organizations composed of members of your ethnic or religious group. Wealthy individuals in your community might be willing to give you a bad credit business loan.

Another potential source of angel investing is people in your business or industry. If you have a successful business but can’t get a loan it may pay to contact successful people who are familiar with your business. Explain your situation to them and if necessary offer them a stake in your business. Such people might be more willing to give you a bad credit business loan because they understand your business in a way bankers don’t.

Business cash advances

A method of lending of last resort is business cash advances. These are high interest loans similar to pay day loans that you pay off with future sales. The advantage to business cash advances is that they are easy to get and can put money in your bank account fast. The terms of business cash advances are flexible and can be changed as your situation changes. The disadvantage to business cash advances is that interest is high.

There are loans available for businesses with bad credit if business owners are willing to locate beyond banks for financing.