If you have a poor or even average credit score, it can seriously affect your chances of obtaining decent startup funding. Capital is essential when you’re starting a business, and most new entrepreneurs aren’t in a position to fund the process out of their own pocket, which is where business loans come in. But, what do you do when your bank says no to providing you with the vital funds that you need to get your startup off the ground and start trading? More and more startup owners are considering alternative methods of funding rather than a conventional bank loan such as the credit options provided by Longhorn Lending. Keep reading to find out more.
No Credit Check Loans
Traditionally, no credit check loans are seen as a short term, small amount of cash to help the lender get through an unforeseen expense. However, an increasing amount of lenders are offering more long-term solutions when it comes to no credit check loans, making them a more viable option for new entrepreneurs. If you own a car, you can use it to obtain credit options which can be paid back according to an agreed payment plan – plus there’s no need to give up your vehicle. These kind of loans may not be the most ideal if you have to lend a large amount of finance in order to get your business started, but they can be a fantastic option for covering smaller, extra expenses or bridging the gap between starting your business and obtaining further funding from another source such as a bank loan or investment.
If your business idea is strong enough, there’s a high chance that you’ll be able to convince an investor who’s got spare money waiting to support you. Investors everywhere are always looking for new and innovative ways to invest their money that will give them a good ROI. If you have a solid business plan and the future looks bright for your business, you may be able to skip the whole bank loan application process altogether and obtain financial help from an investor instead. You will be expected to give the investor a certain percentage of the profits that you make – don’t be put off by this though, as many investors can offer invaluable advice and help that can really catapult your business to success.
Look Beyond Conventional Lenders
Conventional lenders can be strict when it comes to credit scoring. If you’ve got a poor credit score you can almost guarantee that even the most lenient of banks or credit card companies will say no when you apply for finance to help support your business. To them, you’re just too risky – and the fact that you have a poor credit score along with the risks of a startup are just too much. Thankfully, there are a number of alternative business lenders online who you can turn to. These lenders are known as microlenders and their sole purpose is to provide funds for entrepreneurs. Certain microlenders are excellent sources of capital for business owners with bad credit, and will even report your timely payments to credit bureaus in order to help raise your credit rating over time.
Don’t Say No to Gifts and Grants
Doing some research about the relevant gifts or grants available from the government to business startup owners in your area may yield some results that could surprise you. The truth of the matter is that business owners help the economy, therefore the government is surprisingly willing to help them out a lot of the time. Do some searching to discover whether or not you are eligible for any help from the government in the form of gifts, grants or even loans when starting a business.
Family and Friends
Last but not least, startup owners with a poor credit rating should also consider turning to family and friends as a means of obtaining the funds needed to get their startup up and running. Chances are, your relatives and friends are eager to see you succeed and will be willing to lend you whatever they can in order to help make this happen. Family members and friends are also people who know and trust you, meaning that your poor credit score shouldn’t matter.
Don’t let a bad credit score stop you from achieving your business dreams!