Yes, you can have bad credit and still get approved for a business loan
Our company has recently seen a surge in applications from our vendors, and the majority of these new applicants have less than average credit (bad credit). A huge misconception with most business owners would be the credit requirement for working capital loans. Most small business owners assume they need to have exceptional credit when applying for credit. Now depending on the type of credit that may be true. If you’re working with your traditional bank or credit union, they do have higher credit requirements. There are other funding sources that will consider lower credit tiered borrowers, just like First Capital Business Finance.
Here’s an example of a dental office with the business owner that had bad credit
Going back to the topic at hand, we’ve been seen quite a few files with lower credit scores these past couple of months. Which is not a problem for us, we’ll go as low as a 500 credit score. One of these files that stuck to my mind was a dental office looking to buy some new and used equipment. According to the business owner/dentist, he applied with the vendor who he was buying the equipment from two weeks ago. The vendor doesn’t offer financing, but he referred him to one of the largest equipment financing company in the nation. We wont mention any names, but I was surprised that they couldn’t help this client. To make matters worse, this vendor also told the client that some of the equipment because it was used and reconditioned was on a huge discount but he’d have to purchase these items by this past Monday. If he weren’t able to close by Monday, they would sell the discounted equipment to another customer that was on the waiting list. To give you a better idea on how this customer’s file looked, here’s the breakdown:
Years in Business: 15 months
Annual Gross Revenue: $750,000
Business Owners Credit Score: 530
Loan Amount Request: $67,000
The equipment finance company ended up declining this client’s application. Fortunately for us, the client heard our commercial on the radio and decided to call us. We were able to issue his approval within 48 hours from receiving his loan application. He signed his loan documents and got the loan wired into his business bank account within three business days beating the deadline to get the discounted equipment from the vendor. After doing our “thank you” call with this client, we learned that most business owners don’t realize that there are other lending products out there. This client thought the only available financing was through his bank, he had no idea there are other lenders that specialize in small business loans. Let this be a lesson to all business owners; don’t give up if you have been turned down by your bank. Do some research and you’ll find other solutions other than your bank.
Bad Credit Business Loans