Access to a solid source of capital as needed is crucial for any business to grow and expand. Every business is unique, and so the best type of business loan that would benefit a company most varies depending on the needs and goals of each individual business. However, for businesses with bad credit, the financing options that perfectly match their needs are often considered “high risk business loans” by banks and traditional lenders, and denied their chance for success as a result.
The Good News:
Alternative business lending offers new and exciting opportunities for businesses to easily secure their business loan of choice, without the traditional emphasis on risk. Read on to find out how to secure high risk business loans, regardless of credit score and extensive financial history.
5 Steps to Apply for High Risk Business Loans with Bad Credit
- Determine How Much Money You Really Need
Business owners often make the mistake of seeking financing options with the longest terms, and the largest loan amounts, such as SBA loans. While this is ideal for some, for others, these options can wind up hurting more than helping. If you are seeking funding for small, short term goals such as hiring staff, or purchasing equipment, high risk business loans may not be the best option for your business after all. Determine how much money you really need, and consider alternative options with less risk that don’t depend on credit score to avoid paying off unnecessary amounts of capital well into the future.
- Create a Solid Business Plan
Prepare a well-thought-out business plan that clearly details how you plan on using your borrowed capital. Take your time exploring your financing options, and plan a repayment method that best fits your business model. With proper planning, mapped expenses and repayment strategies won’t only make it easier on your business looking ahead, but also show promise to lenders with a detailed and
- Step 3: Consider Your Ability to Leverage Assets
Traditional lenders have been known to scheme their clients into leveraging their personal and business property, including their cars, home, and their businesses themselves as collateral for what they consider to be “high-risk” situations. If you are in a position where putting your personal and business assets at risk of being taken away is not an option, consider alternative financing options that do not require collateral, such as business lines of credit, and merchant cash advances.
- Pitch Your Idea
Every business owner knows the importance of first impressions. Lenders want to know that their capital is going to be used to achieve positive results. Pitch your goals in a way that excites lenders about how you plan to use their capital to improve your company. Demonstrating passion for your business with a pitch that provides clear insight as to how you’re going to use your lender’s capital—and how you plan on paying it back—is extremely important when applying for high risk business loans.
- Seek Guidance From an Expert Business Financing Advisor
As a business owner, you know your company better than anyone else. While you may know what kind of business financing you’re looking for, a little help can go a long way. Consult with an business financing advisor such as those at National Business Capital to get expert insight as to which type of business loans would benefit your business most. Get a second opinion, and save yourself time, money and stress along the way.
Consider Alternative Business Financing Options
Even if you manage to secure a high risk business loan as a business with bad credit from a bank or traditional lender, their demand for stellar credit often result in terrible loan terms and unreasonable underwriting.
On the other hand, alternative business lenders like National Business Capital do not approve their clients based on their credit scores or financial history, but instead focus on the bigger picture, and the value of their clients’ businesses as a whole. Additionally, the alternative lending space allows NBC to offer business financing options unavailable at banks anywhere else. SBA loans, business lines of credit, purchase order financing, and accounts receivable lines of credit are just a few examples of business financing options offered by NBC to businesses with poor credit that would otherwise be considered high risk business loans.
Why Choose NBC for High Risk Business Loans?
Because NBC knows that the same business financing options labeled as “high risk” by banks are often the types of loans that help businesses most! Many of the businesses that National Business Capital works with have been denied by banks and traditional lenders that claim the financing options they seek are high risk business loans. These businesses now contribute to NBC’s 90% approval rating, due to their belief that a company is not defined by their credit score.
Contact NBC’s team of business financing advisors at (877) 482-3008 to ask how they’re helping businesses with bad credit around the world grow and expand their business. Or, fill out this 1-minute, 1-page application to get approved in as little as 24 hours or less.