Finance Options: Bad Credit Business Loans
Get Unsecured Credit with a Quick Approval Loan for Your Small Business
So what are your options as a small business when your credit is poor?
Many small businesses suffer as a result of being new start ups or being cut off from traditional loans by high interest rates and their bad credit history.
However many Canadian financing companies offer unsecured credit for businesses in this very situation. Often these loans are granted with quick approval and easy access to funds to allow you to build your business without worrying about financing and you can apply for one here.
If you’d like to learn more first, here are some commonly asked questions about finding unsecured credit loans to give your business a push in the right direction.
Why do I need a bad credit business loan?
The chances are that by reading this, you are suffering from bad credit. This could be down to a personal credit history or problems with your business. Perhaps you have applied down traditional channels and found your opportunities blocked. Maybe you require funding quickly to stop your business from going under. If your small business is your lifeblood and you want to throw everything into it, an unsecured loan could make all the difference.
What am I using the unsecured business loan for?
In most circumstances, bad credit loans for business will be to keep the company functioning and operating. Many merchants turn to this type of loan in times of dire need, such as purchasing stock or inventory that is integral to the business. It may be used to refinance other debt, and thus improve an existing poor credit score. It could also be for non-emergency situations. An emerging business that requires an instant cash boost to hit the ground running may turn to an unsecured loan, particularly when proof of sales and a lack of credit history has blocked off alternative routes to funding. A reliable lender will speak to you about your reasons for wanting an unsecured loan, as they will want to see some evidence that you will be able to meet the repayments.
How fast can I get approved for a loan?
The advances in technology and the number of independent providers, as well as banks, means that applying for a bad credit loan has never been easier. Competition in Canada in this sector is fierce, allowing you to shop around for the deal that suits your own needs. Typical application times can be as low as five or ten minutes to fill out the required information and receive an instant decision on your proposal. With turnover this fast, a bad credit business loan could only be a few mouse clicks away to help your business get back on track and easier to secure compared to going to a conventional small business loans company.
How much money can I borrow on a bad credit loan for business?
This figure will depend on the lender in question and how much you need and it might be worth reading some finance tips to help get an idea of what you need. It will also depend on how much you are willing to stake to ensure you receive the funding required. Some financial lenders will specialise in large amounts, but this will raise interest rates and repayment models considerably. A typical maximum fee would be around $50k, with many merchants using these loans for much smaller amounts. Some unsecured loans can be available for up to $500,000, but these will not usually fall into the category of bad credit loans for small businesses.
Will I need collateral?
This is one of the advantages of a bad credit loan. In a traditional bank loan, good credit and collateral is needed to keep the agreement secure. This brings down interest rates but requires more of a risk on the part of the merchant, particularly small businesses who work in a volatile market and where success is by no means guaranteed. A bad credit loan will not expect you to have collateral, however, as the risk from the lender is increased. This in turn leads to increased interest rates, meaning that your repayments are higher in relation to the high risk taken out by the lender.
What will I need to complete the application process?
To ensure a quick decision on your bad credit loan you will need to provide formal identification, such as a valid drivers license or passport. You will need to speak to the lender in question to make sure you have all the sufficient paperwork, as each company will have various requirements. The more information you provide earlier on, the more likely your application will be successful and the quicker you will be able to access those all important funds.
Will I be able to repay the bad credit business loan early?
This is an important factor to consider in your application if you are looking for funds that you know you can quickly pay back. Perhaps you are short of stock or you are preparing for a busy period of sales. If this is the purpose of your unsecured loan then an agreement without early repayment fees would be the best option.
What should I be looking out for in a bad credit business loan?
Whatever your reasons applying for a bad credit loan – emergency, start up costs, cashflow issues – you need to make careful notes on all of the repayment terms. Working out a business plan is essential, no matter how fast you require the money to be accessed. Making a long term repayment plan will guarantee that the unsecured loan is a positive decision and not an expensive mistake. You also need to make sure that the loan you choose is suited to your own business. There may be specialist options in your area of industry or in your local area. If the money is needed instantly then make sure that the lender you choose can grant you swift access to the funds you require. You should also make sure to carefully read the terms and conditions, to make sure there are no hidden fees or unreasonable demands. Despite an unsecured loan often being a quick fix, it should still work for you and is fully compliant with the financing act.