While there are plenty of bad credit loans for business out there, it’s important to do your research. In this particular situation, the lender is taking on most of the risk of the loan, which means it comes with a higher interest rate than the standard loan offered by the bank. But bad credit loans for business do have the advantage of getting you out of debt and getting your business on its feet when the banks won’t take a chance on you, so they are well worth looking into.
What you need to do is compare the interest rates on offer from different lenders to make sure you are still getting a good deal. There are plenty of shady creditors out there, all too willing to take advantage of businesses look for bad credit loans for business. This could end up sending you into further debt with no end in sight.
So how do bad credit loans for business work?
There are no set guidelines when it comes to qualifying for bad credit loans for business. You will find that most non-bank lenders will assess your claim on a case by case situation. There are some things you will need to prove to be considered:
- Show that you have regular cashflow coming in. This proves you are in a position to pay off your bad credit loans for business. Some of the documents you can gather include BAS or tax records, bank statements from the past six months, personal identity documents and proof that your business has been trading under your ABN for the required time frame (about two years).
- Get your business plan together: outline what you wish to borrow and how you intend to use the funds.
- You don’t have any multiple defaults: while your credit history can be looked over to an extent, if you have a history of defaulting on loans then non-bank lenders might not be willing to take the risk.
- Show that your previous bad history was a one-off mistake: we all make mistakes. Being able to show that your bad credit history is in the past and you are moving forward in a positive way will help your situation.