Bad Credit Loans for Small Business

There are many sources of financing available for small businesses that have bad credit ratings.

The way to get a loan or line of credit for a business with bad credit is to have two things: proof that your business is making money or is capable of making money and a good business plan. Many traditional and non-traditional lenders will overlook a bad credit rating if a business owner has a record of making money or a really good business plan.

Investors for a bad credit small business loan

Venture capitalists, private equity firms and angel investors are specialize in riskier investments. Bad credit ratings may not deter these investors if a business has a really good business plan or proof of earning a profit.

Locating venture capitalists (investors that buy a stake in your business in exchange for venture capital), private equity firms (companies that loan on equity) and angel investors (individuals who advance money to startup firms) is fairly easy. Many search engines and websites can provide you with lists of these financiers. Convincing them to overlook your bad credit history can be the hard part.

Since investors are interested in making money the best way to convince them to invest is show them that you are making money or can make money. Use your accounting software to put together a package of paperwork that shows how well your business is doing. This should contain bank records, records of sales and orders, credit card statements and other documents that prove you’re making money and paying your bills. Another good item to include is testimonies from satisfied customers because this proves you can achieve your goals. Investors will look far closer at such evidence of hard money than a credit score.

A good business plan

You’ll also need a really good business plan to convince the investors what your goals are and how you plan to achieve them. Plenty of business plan writing software is available online and elsewhere. These programs can help you generate a professional looking business plan.

Another way to get a business plan to is to contact a business school or department of business at a local university or college. The professors at such an institution may help you write a business plan. Or they may put you in contact with a business student perhaps an MBA candidate who can help you write the business plan or write it for you.

There are also groups of retired executives that advise new businesses. A member of one those organizations might be willing to help you create a business plan.

The key to getting a loan from an investor is to look as professional as possible. A professional looking business plan is a good way to start.