Many would argue that we live in an entrepreneurial age, and while it is true that the business world is rife with opportunities for aspiring business leaders, that doesn’t make the task any less challenging. This becomes especially true when you find yourself in a financial bind, and in need of quick funding to get the proverbial show on the road.
Assuming that you have already created a business plan and that you have all of the necessary data to give some viability to your business idea, now is the time to seek out secure funding options that will take your not-so-enviable credit score into account, and then look the other way. Here’s how you can fund your business even with a bad credit history.
Try your luck with crowdfunding
Much like the entrepreneur needs to invest in key areas of their business in order to thrive, they also need other people to believe and invest in their idea as well, in order to get the ball rolling in the first place. Enter, crowdfunding. Or, social lending – however you prefer.
In recent years, there has been a surge of crowdfunding platforms on the web, and many unlikely business ideas have managed to obtain the financial support needed to bring their concept to fruition. Platforms such as Kickstarter and Indiegogo are popular financing solutions for business ideas with a business plan and a concept that is truly relevant to the public.
Remember that in order to obtain this type of financial support, you will need to come up with an idea that aims to make a difference in the world. For example, pitching an idea about a new way to aid the preservation of the environment might get plenty of support, whereas asking for money to launch an auto-repair shop might not.
Find prospective lenders
A business loan is, and always will be, one of the safest way to a solvent future, bad credit or not. While it is true that banks frown upon applicants with a bad credit history, you should know that there are plenty of lenders out there that work specifically with such clients. Entrepreneurs who have learned from their financial mistakes, who have developed a sound business plan and growth strategy can easily get their second chance at success in the business world.
This is why online business loans for bad credit have become so popular in recent years among aspiring entrepreneurs and established business leaders, as they allow you to obtain the necessary financing despite your credit history. When applying for a loan, be sure to choose a plan that can cover your immediate and long-term needs, so that you can safely scale your business with time and effectively improve your credit score.
Obtain a business line of credit
Obtaining a business line of credit is another way of creating a financial foundation for your company, and there are two ways you can approach this problem: applying for a bank loan or getting a smaller line of credit from alternative lenders. Given your bad credit history and the general unwillingness of banking institutions to extend lines of credit to clients like yourself, the latter option might seem like a more realistic solution.
This type of credit is a good solution for business owners in need of flexible financing, as it allows you to tap into a pool of funds whenever you’re in need of financial supplementation. The good thing is that you will pay interests only on the funds you draw, which is a sound refinancing option for those slow-revenue months of the year.
Use invoice financing to your advantage
One of the main reasons businesses ultimately go under is because of poor cash flow management. Invoice financing is a great solution for businesses struggling with unpaid or slow-paying customers. Instead of hunting them down and asking for your money (inevitably ruining your relationship in the process), you can use invoice financing to free up some of the capital needed to keep the ship afloat.
Your customers and clients can pay at their own leisure, thus remaining satisfied with your service while you get to direct the revenue towards improving your cash flow. This is a win-win solution for established businesses going through a rough patch, as the financing institution can recoup its losses by collecting on the invoices in case you’re unable to repay the collateral.
Many aspiring entrepreneurs and established business owners suffer under the unrelenting weight of a bad credit history, but even though obtaining the required finances from traditional sources might not be feasible, there are still viable refinancing solutions out there. Without losing hope, go ahead and explore these solutions in order to safely finance your company towards a solvent future in the business world.
Business and Marketing Specialist