According to statistics quoted by FINRA Investor Education Foundation, more than 52% of the people who checked their credit scores in the 12 months preceding December 2009 reported credit scores of above 720. In contrast, only 17% of those who have checked their credit score have scores below 620. Several funding options are available for start ups depending on their credit scores. Good business credit scores are a pre-requisite for getting funding from any of the lenders or investors. However, no bank or financial institution is going to support you if you have a personal credit score of less than 640. What to do in such a scenario? Read to know the importance of bad credit business start up loans in this article.
Facts About Bad Credit Business Start Up Loans
The most important step for getting bad credit business start up loans is to separate your personal credit from business credit. Smaller community lenders and specialty lenders focus on a combination of business and personal credit scores. So focus on having good business credit scores.
The difference between personal credit score and business credit scores is that the latter is not related to your social security number. You can build your business’s credit by making your business a legal entity and having a tax identity number for it. This allows you to qualify for vendor and supplier credit lines which can then be used as a favorable credit history. Leveraging these small credit lines can help you get larger loans even when you have bad personal credit. These loans can be availed of if your business has good credit history with major business credit bureaus, such as Experian, Equifax and Dun & Bradstreet.
Benefits of Bad Credit Business Start Up Loans
Bad credit business start up loans can be used for any type of business related expenses, including purchase of commercial sites, machineries, stationeries or any other type of office related commodities. These loans can be secured or unsecured depending on whether the business has any collateral to offer.
The amount of loans is dependent on the type of collateral and the purpose for which credit is required. However, the interest rate on these loans is slightly higher than the normal loans. A borrower can approach different lenders and opt for the ones offering the most competitive terms including interest rate and repayment options. A precaution that every business owner should take while opting for these loans is to provide all the information including related to the personal credit score correctly and precisely. Timely repayment of bad credit business start up loans provides a person an opportunity to improve his overall financial position and credit scores.
CashFlowExperts can help business owners with bad personal credit to get bad credit business start up loans . You can separate your business credit scores from personal credit scores with the help of company’s expert staff. You simply have to visit thomaskishbusinesscreditsolutions.com and get the necessary help and support.