Bad credit is not a barrier for small business owners who want to obtain business financing. When a small business owner plans to expand their business and finds that they have already exhausted available funding sources and obtaining additional funding through regular sources may take too long, then financing from “unconventional” sources may be a better option. .
What would be the requirements for a business owner to obtain financing for a small business?
a running business
Start-ups are required to obtain this type of financing on favorable terms. To be eligible, a business must be in operation for at least one year.
A minimum amount of sales per month.
Someone who has recently started the business and is generating income of less than $10,000 through credit card sales may not be eligible for small business financing unless the case is evaluated and considered for other reasons, such as potential of growth that the owner can justify and support.
Documentary evidence
Small businesses are usually proprietary types. Any business owner, even one with poor credit, shouldn’t hesitate to raise capital for a small business, even if it means paying a higher amount of interest, as it can help get you back on the path to rapid growth. Documentation is minimal. You need to present proof of ownership. The other documents that he must provide are bank statements for the previous six months, proof of identity and proof of residence.
An applicant may wish to obtain small business financing within 3-5 days by submitting an online application and having scanned copies of the above documents ready. These can be uploaded along with the preliminary application. If the request is approved, you may be required to provide hard copies.
What is not required for the small business loan?
• An applicant does not need to have a stellar credit history.
• You may not have to pledge or mortgage the property.
• You may not have to provide a guarantor.
It’s fast. It is easy. However, there are a few things to keep in mind. An applicant should consider the factor rate applied. This is a fancy term for interest rate, although it is not specifically mentioned. The rebate can range from 3 months to 36 months and is linked to credit card sales as a percentage of daily billing or a fixed monthly amount. If the sales are high, the refund is completed in a shorter time. In real terms, an applicant may end up paying processing fees plus interest that can be as high as 50% because the loan is unsecured. Your best bet is to review the offer and obtain such funds only from a lender that charges nothing up front, charges no processing fees, and charges a moderate interest rate.
Obtaining this type of financing is easy if you have a running business, but repayment is the hard part. Small business owners would do well to keep in mind that they plan to use the funds to generate more income rather than pay off existing debt.
