Do you own a small business, but can’t find reliable payment processing because of bad credit? Don’t let bad credit stop you from starting your business. A new study shows that only 25 percent of merchants are turning to banks for financing. Instead they use more efficient and less restrictive methods to get the critical funds necessary to grow their businesses. The following are a few ways that businesses with bad credit are securing funding.
If your business’ credit is between 300 and 629, you should consider a micro lending option. Micro lenders generally dish out small to medium-sized loans between $3,000 and $35,000. Micro lenders don’t have as many restrictions as banks, and have much faster approval times.
Merchant Cash Advances
MCA’s are also a popular choice for companies with bad credit. Providers are repaid by using a predetermined percentage of a merchant’s daily credit card receipt volume. This means that on slow days, merchants pay less to lenders than when business is booming.
Getting a Co-signer
Another way to get funding is to find a partner with good credit that is willing to co-sign a loan. But co-signers should understand the possible risks. If merchants are late with payments, or default on the loan, the co-signer’s credit will also suffer.
Some merchants opt to skip official lenders and applications altogether. Instead they go straight to their target audiences and potential investors for money. Many entrepreneurs have found great success with social lending websites. They simply create a message or business plan/proposal and broadcast it across the world. This drastically increases their chances of finding investors.
Use Financial Assets
If your business is less than a year old, a good way to raise capital is to use equipment lenders. These lenders use office equipment as collateral, and place far less emphasis on personal credit.
EMB specializes in working with bad credit merchant accounts. Get quick, simple, and straightforward, services and funds from professional payment processors. EMB is the nation’s leading online small business lender with a streamlined application that is also user friendly. Contact us today to start your bad credit merchant account today.