How Can You Get Good Business Funding With Bad Credit?

Getting business funding with bad credit is not easy. Traditional banks will almost always say no if your credit score is too low. However there is another option that offers a solution for small and medium sized business owners. That option is the merchant cash advance industry, which is a multi-billion dollar industry you've probably never heard of. MCA's are funding businesses all over the country and they might be the right solution for you too.
Business Funding With Bad Credit

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How Credit Effects Business Owners

Business owners are just like anyone else when it comes to needing credit. Everyone will need to purchase something on credit at one time or another. The difference between a business owner and a non-business owner needing credit and not having access to it is a big one however. While a non-business owner can continue to work at their 9 to 5, a business owner may be forced to shut down if they don’t get the loan they need. Not having the capital to keep your doors open is something that every small business worries about at one point or another. 

Ready To Serve

 Facts on Funding

If you’re looking for business funding with a poor credit score, don’t worry. You’re not alone and there are many business owners in the same position throughout the year. The facts are pretty eye opening when you consider that:
  • 27% of businesses surveyed by the national small business association claimed they needed funding but did not receive it. For those businesses the most troubling result from not getting funding was preventing them from scaling their business for growth.
  • Lack of funding could mean losing or being unable to keep your customers.
  • 29% of small businesses fail because they run out of funding.
  • 36% of small businesses are denied the cash they need because of their credit score.
  • The majority of small businesses are seeking less than 100,000 dollars in funding
  • 20% of businesses owners are only seeking less than 25,000 in capital. 
Business Owner Finding Funding
Finding the right solution when your credit score is bad is key

Your Options Are Limited 

There are a few good options if you find yourself in need of a loan but can’t get approved. The fastest and easiest option is known as a merchant cash advance. This solution is great for several reasons. Which we will get into below. Before we do, know that MCA’s are advances on your future business transactions. So you’re going to need to have a high volume of transactions, typically more than $10,000 per month.

Fast Funding Wires Direct To You

One of the best features is the speed in which you can get funded. As long as all the requirements completed by the applicant, we’ve seen funds cleared in the business owners account in under 4 hours, however, it usually takes under 24 hours. Comparing this to bank funding which is 4-12 weeks of wait time. Really any other type of funding is slow in comparison. When it comes to speed merchant cash advances can not be beat. 

Zero Hard Collateral Requirements

Almost all banks require hard collateral. Because a merchant cash advance is an advance on your future credit card transactions, there is zero need for physical collateral. This is a huge advantage to business owners as long as they have high volume of transactions. If you’re in a position where you can show a history of business, you’re in good shape. Ideally you’ve got at least 6 months of books that show what kind of business you’ve done.

No Credit Pull

Another benefit of an MCA is there isn’t a credit pull. This is always nice to hear as credit pulls have been shown to affect your credit score negatively in some cases. Especially so when you’ve tried several banks who have denied you in a row after doing hard credit pulls

Flexible Repayment Plans

Let’s face it, banks and credit card companies aren’t known for their flexibility when it comes to repayment. The nice part about working with an MCA provider is they will tailor and adjust your repayment process to match your specific needs. This is a huge relief for small and medium sized business owners who are often affected by the “seasonality” of their customer flow. There’s also a lot less fee’s associated with MCA’s. Banks have been known to charge any kind of fee’s they can in the fine print. Origination fees, Personal check fees, late payment fees, returned payment fees…the list goes on. 

Bad Credit Funding

That feeling when you get your advance deposited in under 24 hours
 

Business Funding With Bad Credit 

While you may be able to secure business funding from a bank or credit company that is considered a “bad credit loan” you may find that it isn’t the right option for you. You need to consider all the factors that personally effect you and weigh your options. Bad credit loans may simply require too much than you are able to give. You also may further damage your credit by taking them. And we know that lowering your credit score can have snowball effects, like causing your insurance premiums to go up.

Luckily the solution to this problem is pretty clear. When you can’t secure a personal loan from a friend, or a business loan from a bank, merchant cash advances are a clear winner. It’s completely understandable and normal for people to need a hand, especially in the wake of the pandemic which has affected so many of us in more ways than one. If you’re interested in getting more information reach out to us today and see why MJ Capital Funding is making a difference in peoples lives.