Cash Advance Credit Card, Business Advance and Other Options for Bad Credit

2015-02-11

Jeffrey Bumbales

You know what you need in order to grow your small business, but what if you have less than perfect credit to fund your ideas? Without access to funding, capturing those business dreams may seem more like a scene from Mission Impossible.

If a traditional bank loan is out of reach, there are other options for small business working capital.  Some alternative lenders look at what you have created and your business potential rather than your FICA score. A cash advance credit card can be an ideal solution for having cash available when it’s needed.

Look At My Business Performance, Not My Credit Profile

Since the economic downturn of 2008, there has been a void in funding solutions for small businesses. According to an article at Forbes.com, most small business owners don’t meet the banks’ new stringent criteria and those that have less than stellar credit scores have been forced to seek funding outside of their bank.

So, you are not alone. The good news is that a new market of lending solutions has been created to meet this growing demand.

Alternative funding looks more at the overall health of your business and sees your potential. It is a good fit for small business owners with an entrepreneurial spirit because it allows them, regardless of their credit score, to fund an opportunity for growth and do it with ease.

With alternative business funding, what used to take several weeks to a couple of months can now be done online in a couple of days.

Will You Qualify For Financing?

To determine if alternative lending is a good solution for your business, ask yourself this:

  • Is your credit less than stellar?
  • Has your business been doing well, but has gone through a series of ups and downs?
  • Do you have concerns that going through the tedious loan process at a bank will be a waste of time?
  • Are you ready to move forward, but need cash in the next week or two? In other words, do you need a fast solution?
  • Is your business fairly new, lacking an extensive history or established credit history to show the bank?

If you answered yes to any of these questions, you need your lender to look at the overall health of what you created and trust in your ability to take it even further. It is time to look at alternatives in funding solutions.

Meeting the Credit Challenge

There are a few funding options you can turn to with a less than perfect business credit score:

Merchant Cash Advances

A Merchant Cash Advance is an unsecured funding option that is based upon the volume of sales and the health of your business as a whole. Approval of your application for this type of advance is not determined by your credit score, the age of your business, or the minutia in your detailed business plan.

Unlike a bank that seeks collateral, this type of funding answers to immediate needs based upon what you have created in your business. The decision for your merchant cash advance is typically made within two business days.

A Merchant Cash Advance provides you the funding you need, which is paid back based upon a small, set percentage of your business’s daily credit card processing receipts. So, each of your payments are not a set amount, but are based upon the current sales volume of your business. This allows for sales to ebb and flow and your payment to adjust accordingly.

According to bizfinance.com, Merchant Cash Advances has become the leading funding option for many small business owners with less than perfect credit, particularly because the payment adjusts according to the sales volume of the business.

Lines of Credit

Similar to using credit cards, Business Lines of Credit means a lender lets you borrow money up to a certain set amount. Banks may still look at your credit score for this type of lending, but alternative lenders typically look at the overall health of your business today.

With a Business Line of Credit you only borrow exactly what you need and your interest is based upon what you borrowed, not the full amount available. Similar to credit cards, but with lower interest rates, lines of credit are typically unsecured so they don’t require collateral or long repayment time-frames.

Credit Cards

Though there are some credit cards offered to those with a less than perfect credit score, according to entrepreneur.com, they typically hit the borrower with a much higher interest rate. That means you will be charged a much larger amount of interest than someone with good credit might expect or other types of lending. This is a solution, but one that comes at a cost.

Equipment Loans and Leases

This option is strictly to provide cash for purchasing or leasing equipment. It can cover anything from computers to machinery and allows your business to spread payments out over time.

These loans can be easier to obtain regardless of your credit score because the equipment itself serves as the collateral required for the loan. This also means that if you don’t keep up with payments, the lender can seize your equipment.

Loans For Imperfect Credit

If you have a less than perfect business credit score, there are still funding options available to help you succeed. Ask questions, look at the risks involved, and consider which option best suits the needs of your business. Credibly offers loan alternatives that will work for you. To get started, fill out our online pre-qualification form – it’s simple, free, and will not negatively impact your credit score.