Starting a business brings with it a large list of obstacles to overcome. If your personal credit history is not pristine, it can make the task even more difficult. However, it is not impossible. There are options out there that will help you to obtain the funds you need in order to be financially prepared to start your business.
Capital. Entrepreneurs usually have some types of capital at their disposal that they can put into their business: personal savings, retirement accounts and/or loans from family and friends. Even with all of this, it is sometimes not enough to cover the funding necessary to launch your business.
Social lending sites. When bad credit is an issue, there are other routes you can take to receive funding for your startup. Many have turned to the numerous social lending sites available on the Internet. Social lending sites allow its members to borrow and lend to one another. Obtaining these sources of funds are easier since you can explain your situation directly to the funding party. The rates of these types of loans also tend to be much lower than the ones you can receive from a traditional lending source. The major advantage is that the funds you obtain from social lending sites can be used for any purpose; such as, starting and running your business.
Micro-credit organizations. These types of organizations’ sole purpose is to help new and growing businesses obtain capital after they have been turned down by traditional lenders. Typically non-profit groups, these organizations understand the trials that business owners face.
According to businessknowhow.com writer, Joseph Lizio, “They work with new start-ups and are extremely flexible in developing programs that can meet these businesses specific needs and while these loans and leases are secured by collateral (the equipment) there is less emphasis put on personal credit histories.”
Factoring a business’ receivables. Factoring a business’ receivables is also a form of capital resources. Instead of waiting 30, 60, or 90 days to get paid by your customers, you can purchase order financing. Doing so means that your business can receive cash to complete jobs that have already begun. Or, you will have the funds to bid on jobs that you might not otherwise have the working capital to obtain.
Bad Credit Merchant Account. Increasing in popularity among startups, a bad credit merchant account can offer you fast solutions to your funding needs while also working with your credit situation. For example, emerchantbroker.com can help you regardless of your FICO score, previous processing history or even bankruptcy and tax liens. They can even assist merchants that have been placed on the TMF or “black” list for Visa and MasterCard accepting merchants.
While traditional lenders may be tossing your needs to the side in the “undesirable” pile, don’t despair. The options above should help to fill the lending gap that is preventing you from your startup goals. Believe it or not, despite past credit mistakes, there are desirable options out there that can be the answer to your funding needs.