Most business owners know how important adequate funding is for running a business. Thankfully, if you need cash to fund your business, you have several options. You may think applying for a business loan through a traditional lender is the best choice, but what if you have less-than-stellar credit?
It can be challenging to operate a business when you have poor credit. Many traditional banks and lenders require a minimum credit score to approve a business loan or business line of credit, leaving fewer options for those with a shaky credit history. That being said, Good Funding was created to offer an alternative solution for small businesses, startups, or any business owner who may not meet the stringent requirements set by traditional lenders. We are here to tell you it is possible to get business funding with bad credit.
Even though Good Funding evaluates many factors besides credit score, it is important to know how your personal and business credit history can impact your ability to obtain financing. Most business funders place heavy consideration on credit score when evaluating a funding application. Even though Good Funding evaluates many factors besides credit score, it is important to know how your credit history can impact your ability to obtain financing. At the very least, you should know your personal credit score is determined by the five C's of credit: character, capacity, capital, conditions, and collateral.
All of the factors above combined determine your creditworthiness. Credit scores can range between 300 and 850. The higher your credit score, the better your chance of getting approved for a traditional business loan.
Lenders will set their own standards for what they will accept, but here is a general outline of what is regarded as a good or bad credit score:
Each business funding company has its own credit threshold for approving a line of credit. Some lenders offer loans to borrowers with a credit score of 560, and some only lend to borrowers with a 660 credit score or higher. As an alternative business funding company, Good Funding evaluates many factors beyond your credit score. Plus, we make the process quick and seamless from application to funding. There is no hard credit pull, and you can apply today and receive funding as soon as tomorrow.
Most banks or lenders use your credit score as a benchmark to predict how at-risk you are of default. As a result, businesses with good to excellent credit are often offered better interest rates. Those with a lower credit rating may still get approved, but the business funder will charge a higher rate to anticipate covering a potential loss.
Good Funding recognizes other equally effective benchmarks when evaluating a business owner's ability to pay back funding, such as recent revenue, time in business, industry and location. Our underwriting allows more businesses the opportunity to access much-needed working capital.
Whether or not your business has an established credit history, lenders will typically use your personal credit score to determine if you are a good candidate for their business funding product. As a result, improving your personal financial situation and credit score is also advisable before you apply for business funding.
If you apply with Good Funding, we will never do a hard credit pull. We will take a wholistic look at your business - no matter your credit score - and if we approve you, funds could be in your account by the next business day and you can get back to running your business sooner.