Having the desire to start your own business is often not enough. You will want to make sure that you have the start up funds that you need. Often this will require a small business loan. Start up bad credit SBA loans would really help out, but can you really get one?
The Small Business Association is a government program to help small businesses get started and to keep running. They don’t actually lend out money. Instead the SBA guarantees a portion of your loan to your lender and that makes it easier to get a loan through a traditional lender when you otherwise wouldn’t qualify.
Are There Start Up Bad Credit SBA Loans? Credit: morguefile.com
Because SBA loans are often given out to people who wouldn’t qualify for a traditional loan there are a lot of people who say that you can get start up bad credit SBA loans without a problem and no matter what your credit looks like. However that isn’t true. Here are the facts.
â— Your credit scores and credit history will be considered when you apply for a SBA loan. In some cases, they may be a bit more lenient then the lender, however they won’t give out a start up bad credit SBA loan. You will still need at least decent credit.
â— The SBA loans are often given to people who don’t have the collateral that the lender would like them to have. Collateral such as assets and property is often used to make sure that you will be getting the money back to the lender. If you don’t have a lot of property or assets then you might need the guarantee that the SBA loan gives in order to get the loan.
â— When applying for a Small Business Association loan, especially if you are trying to get a start up bad credit SBA loans, they are going to want to look at a detailed business plan that takes into account all of the things that could happen. They will want to check out your collateral and they will want to look at your credit history and score. They will also want a personal guarantee from you. They want to know that you need to have the business work in order3r to make it cause thatCredit: Amazon.com in turn will make it more likely that your business will succeed.
â— If you are wanting an SBA loan then it is a good idea to go and talk to a lender who will help you work through the process. Whenever you are trying to get a loan it is a good idea to work with a lender that has experience with you if at all possible.
Are There Any Small Business Loans For People With Bad Credit?
So now that we have covered the bad news, there aren’t really start up bad credit SBA loans, there is some light. There are lenders out there that will offer an unsecured loan for your small business start up costs. The interest rates are a lot higher than a secured loan or an SBA loan, but it is an option for those that are wanting a loan right away and don’t have any other options.
Because start up bad credit SBA loans don’t exist for those that have really bad credit it is important that you get your credit up as high as possible. You don’t have to work to get your creCredit: morguefile.comdit score perfect in order to get yourself some better options, but working on making better can help a great deal.
â— Start by checking your credit report. Since you aren’t likely to get start up bad credit SBA loans you will want to make sure that your credit score is as high as possible. This will let you know what your lenders are seeing when they look you up. You want to make sure that you work on clearing away as many negative things as possible. If there are things that are on there that aren’t things you put on there you can refute them. If you have unpaid debts on there you should contact them and make arrangements to pay them off. In most cases they will take a percentage of your debt and call it even.
â— You should work on paying off as much of your current debt as possible to make sure that your debt to credit ration is good.
â— You should also work on paying your bills on time each month. When you pay your bills on time that’s good for your credit and when you pay them late it’s bad for your credit.
Sadly there are no start up bad credit SBA loans, but that doesn’t mean you should just give up hope. Instead you should know that there other options including unsecured business loans and the opportunity to improve your credit high enough for you to qualify for an SBA loan. It may take time, energy, and work, but you can get to the point where you qualify for a loan and can start your business.