Finding funding as a small business owner can feel like being caught on a catch 22 carousel. Traditional lenders are not willing to take a chance on businesses that don’t have years of proven sales and flawless credit scores. So what is an emerging entrepreneur to do? Read on to discover some credit saving tips and viable funding alternatives that will get you off of the funding merry-go-round for good.
Review Your Statement
The first place to start with a credit score situation, is with the credit score itself. Take the time to review your statement and make sure resolved past issues have been dissolved from your case.
Explore curious penalties that you’re familiar with and look for possible errors. For example, your statement may claim you are “delinquent” in payment of XYZ, but perhaps you are simply in “dispute” with the vendor. Not all penalties are treated equally, so make sure that yours are listed correctly and are fair.
Pay Bills Sooner Than Later
Not only will paying bills on time positively affect your credit, but they could save you some money too. Some venders offer discounts for paying before a certain date, be sure to talk with your venders to see if such an offer (or what other offers) are available to you in terms of settling up each month.
Get Incorporated
If you want lenders to take you more seriously, establish your business legally by incorporating it. When the day comes that you try (or try again) for a small business loan, an established business with a designated address and proof of formal statements (like utility bills) will add to your credibility case.
Understand Your Alternatives
If after you’ve implemented the credit saving tips you still can’t get approved by traditional lenders, understand that there are alternative available to you.
Business owners are getting funded everyday by looking beyond traditional lenders (like banks). For example, the merchant cash advance; MCAs do not require perfect credit or personal collateral to be approved (in most cases approval takes less than 48 hours). Another example is the business credit card, which can be awarded to entrepreneurs with poor credit histories. The beauty of these alternatives is that not only can you get funding granted to you, but also by utilizing them properly, you can build your credit score back up.
What has been your experience with finding funding in today’s economy?
Do you think it can be done with less-than-perfect credit?
About the author: Kelly Gregorio writes about topics that affect small businesses and entrepreneurs while working at Advantage Capital Funds, a provider of merchant cash advances. You can read her daily business blog here.
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November 14, 2013 at 6:07 amGetting a Small Business Loan With Less-Than-Perfect Credit | The 123Print Blog