7 Easy Business Loans For When Your Credit and Financials Aren’t Perfect

Borrowing can be tough. The more you need the funds, the harder it is to get them. If you’re a new business or have a low credit score, you might feel shut out from the best financing sources.

7 Easy Business Loans For When Your Credit and Financials Aren’t Perfect

Borrowing can be tough. The more you need the funds, the harder it is to get them. If you’re a new business or have a low credit score, you might feel shut out from the best financing sources.

Not to worry, though, because you still have several borrowing options. Several traditional and alternative lenders offer easy business loans if your financial picture isn’t perfect.

At BCCUSA, we want every hardworking business owner to understand the lending marketplace and know they have options. To that end, we’ve aggregated a list of several easy business loans. If you’re struggling to access capital that fits your business goals, we’d be happy to help.

Easy Business Loans For Poor Credit

Poor credit can disqualify you from several financing sources. Fortunately, certain types of loans look past your credit in favor of other metrics.

1. Invoice Financing

Have a lot of outstanding receivables? You can leverage them to raise capital using invoice financing.

You can sell your accounts receivable outright (called invoice factoring), or, if you still want to collect on them at a later date, you can use borrow against them.

With invoice factoring, you sell your receivables to your lender, and they remit you a large chunk of the total invoice value. Once they collect on the accounts receivable, they pay you a portion — keeping the rest as interest/fees. This method works well if you’re struggling to collect on your invoices.

But if you don’t, you might consider using your receivables as collateral to borrow against. If you go this route, you receive a significant portion of your receivables’ total value — but you keep possession of them. As you collect on your invoices, you pay back the borrowed amount plus interest and fees.

2. Merchant Cash Advance

If you have healthy credit sales figures, then a merchant cash advance shouldn’t be hard to get. Merchant cash advance providers give you funding in exchange for a portion of future credit sales plus the cost of financing.

The cost of a merchant cash advance is known as the factor rate. Your lender adds a predetermined percentage of the amount borrowed (usually 10%-50% depending on your industry) to arrive at your total payback amount.

Say your factor rate is 1.2, and you borrow $20,000: you’d pay back $24,000. 

As you can see, merchant cash advances are an expensive form of financing. But they’re easy to acquire, you can get them within 24 hours, and you only pay when you earn revenue.

3. Royalty Capital

Royalty capital financing is another form of funding that deals with your sales. Under a royalty agreement, your lender gives you cash — and in exchange, you remit a portion of your revenue to them for a defined period.

Lenders offering royalty capital don’t care much for your credit score. They want to see growth potential. When you seek out royalty capital, you must make your financials look as promising as possible. 

Easy Business Loans With Great Rates

Old and new businesses alike can benefit from the great rates that these easy business loans offer.

4. Vendor Credit

Vendor credit — also known as supplier credit — is an arrangement with vendors/suppliers where you can buy things now and pay later.

You’re given a fixed period by the end of which you must pay. For example, if your agreement says you must pay in 30 days, you have net-30 payment terms.

These are excellent for increasing your working capital. You can buy more inventory now, make more sales (and more profits), then pay your bill.

Even better, it’s common for vendors to offer discounts — typically 1%-2% — if you pay early. For example, you might negotiate a 2% discount on a net-30 agreement if you pay within 10 days.

5. Business Credit Cards

 

Business credit cards consider your personal credit score, so new business owners with excellent credit could have financing the moment they open their doors. There are even several card options for entrepreneurs with poor credit.

You can’t discount the rewards that accompany business credit cards. Most cards pay you cashback or travel rewards as you spend. You can redeem these rewards every statement period (and sometimes whenever you want), effectively giving you a small, delayed discount.

Then, there are the introductory perks. 

Many business credit cards will pay a several-hundred-dollar signup bonus if you spend a specific amount within a few months of opening the card. On top of this, some cards offer 0% purchase APR for long periods after opening — sometimes up to 12 months. In plain English, that means you pay no interest on any purchases for a year, as long as you pay the minimum monthly payment and follow any other terms/conditions.

Two things to keep in mind: first, you should plan to pay this card off in full each month. This way, you’ll rack up cashback rewards without the risk of debt.

Also, annual fees. Some cards charge an annual fee upwards of $100. As long as you gain more value from using your card (perhaps the cashback rewards or the returns you earn with the borrowed money), then the fee shouldn’t be an issue. Plus, you might be able to write this off on your business taxes.

6. Equipment Financing

Equipment financing is secured by the equipment you’re buying, repairing, or upgrading. The secured nature of this financing source makes it less risky to lenders than other easy business loans. Even newer business owners have a good chance of finding equipment financing if they show promise.

As a secured debt, equipment financing also comes with low interest rates. If you’re using your equipment financing for a piece of equipment that is close to the sale — say manufacturing equipment — then the loan pays for itself.

7. Online Business Loans

Lastly, we have online business loans. Difficulty here is mixed. Some online lenders require pristine credit, but others are more lenient. 

The only issue is you might pay high interest rates. Still, these are some of the fastest business loans available, with turnaround occurring in as little as a day.

Funding Your Business Doesn’t Have to be Hard

Finding funding with poor credit or financials isn’t impossible — you just have to know where to look. But if you don’t have the time, BCCUSA is here to help. 

With a network of over 150 lenders, we’ll find you a fantastic financing source from your business. Plus, we handle the process for you. We prepare your application, presenting your business in the best possible light. Schedule a consultation today so we can get you the right capital for your company.

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