Though the lending for small businesses are reaching the highest point in the curve, still there are challenges that many small business owners with bad credits face. Many banks and financial institutions are still not ready to lend a loan for small business owners with really a installment bad credit rating. Though many companies have valid reasons for having a poor credit history, those are not still considered by the banks. For example, during recession time, especially in the year 2009-10, many small businesses failed to pay their vendors or faced problems in correcting their cash flow issues. The bad remark on any company may take years to get corrected. In the meanwhile, the company may require some kinds of loans. Luckily, there are many lenders other than banks who are ready to sanction loans even if the small business or the business owner has a bad credit score.
Funding Options for Small Business Loans with Bad Credit
There have been studies conducted which shows that only 25% of bank loans or credit card options have been sanctioned to small business owners. This means there are many other options available for business owners other than these, which is really a comforting fact for many.
Home Equity Loans
To start up a business and build a credit score on it would take months together. In the meanwhile, a small business entrepreneur can apply for a home equity loan if he or she owns a home. But while applying for such a loan, one must think about various risk factors involved in the business, as he or she is pledging the home.