Bad Credit Business Loans
The struggle to find financing is real for many small businesses with bad credit. Traditional lenders may not issue bad credit business loans at all, or may do so at extremely high interest rates. P2P lending offers small businesses an alternative: quick, accessible loans based on your business health, not your credit score.
Loan Types: P2P Business Lending & Cash AdvanceAvailability: UK (£3000+ Per Month with 20% Margin UK Businessess)Securities: Both Unsecured & SecuredLoan amount: £1 – £100,000Interest: Cash Advance – No Fixed APR; Traditional Installments – Not AdvertisedOverall Rating: Innovative 4.5 / 5.0 About Fleximize Fleximize is an up-and-coming SME lender. Rather than lead with a traditional P2P investor/borrower approach to the loan process, Fleximize gets a cash infusion from investors, then makes it available to businesses in exchange for a fixed percentage
Loan Types: Small Business Loans Availability: USA (Only Established/Strong Businesses with FICO Score 500+) Securities: Unsecured – Personal Guarantee Loan amount: $5,000 to $250,000 ($20,000 For Revolting Credit Lines) Interest: APR: 20% and up. Line of Credit Interest: 30% to 36% Overall Rating: High Reliable & Efficient 4.6 / 5.0 About OnDeck Founded in 2006, OnDeck has supplied business loans to thousands of small-to-medium sized US companies. It is one of 2 public companies of its kind (ONDK: NYSE), which also
Loan Types: Invoice Factoring, Line of Credit Availability: USA (SMEs with Unpaid Invoices (B2B Only), Or SME’s Requiring Line of Credit) Securities: Against Unpaid Invoices, Or Unsecured Line of Credit Loan amount: $5,000 – $50,000 Interest: APR: 30% to 50% Overall Rating: Quick and Smooth 3.8 / 5.0 About BlueVine BlueVine is an American answer to the ecommerce line of credit movement led by British companies. Based in Palo Alto, California, the company exists to help businesses finance the sometimes 30 to
Loan Types: Merchant Cash Advance Availability: UK (Accepting Payments By Card) Securities: Against Invoices Loan amount: £2,500 – £300,000 Interest: Not Fixed, High Overall Rating: Helpful 3.7 / 5.0 About Liberis Liberis is a strong lender with a simple business model. They quickly approve and finance business operations for many reasons. Businesses pay them back by giving them a portion of daily credit card sales. On days where they make less, they contribute is less, until the balance is paid. Businesses
What Risks Are There to Bad Credit Borrowers Using P2P?
Because bad credit history often indicates inconsistent credit repayment, these companies are likely to issue loans to businesses at very high interest. The extra money is used to offset the loss incurred if a borrower defaulted. The higher the risk, the higher the interest. Still, because P2P high risk business loans may be the only available to bad credit businesses, and it can be paid off early before interest payments mount, it may be the only option.
What About Payday and Short-Term Personal Loans as an Alternative?
So-called Payday Loans are an often usurious lending form, meant to provide quick cash in a pinch, usually paid back in a matter of days of weeks. The practice is heavily regulated in some jurisdictions, not in others. Typically, borrowers will incur stratospheric interest rates which, depending on how you calculate interest on a loan with a few days’ term, have been recorded from 30% to 3000%+. With lots of bad press highlighting the folly of payday loans, businesses are much better served with business loans from reputable institutions, many of which in the P2P arena are more convenient than Payday lenders, without the risk.
Why Not Get a Bad Credit Business Loan From a Bank?
Because banks tend to look at your credit score first, many are immediately denied when requesting a traditional business loan. P2P lenders use a diverse array of data to determine your creditworthiness, including your online merchant history and other facets of your overall business health.
How Can You Improve Your Credit Score for Better Loan Terms?
There are many factors that determine your credit score. It is important to always pay debts and bills on time, to carry no more than a 30% balance out of your available credit, and to have as long a credit history as possible with old accounts from established institutions. There are other factors, but if these are observed alone, it’ll make a big difference in your credit score.