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03 - Raising Capital Funding Options for Small Businesses

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  #1  
Old 03-17-2011, 11:17 AM
Sim Sim is offline
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Wink How to obtain a business loan with bad credit?

I am 27. I am in the process of writing my business proposal. How would I go about getting roughly a 10k business loan when my personal credit is shot. I destroyed my credit 6years ago.

Let me also say, that my business is a unique service online where estimated revenue for this type of business niche exceeded over 11B last year.
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Old 04-09-2011, 08:25 PM
David Staub David Staub is offline
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Unfortunately, small businesses typically only get credit based on the personal credit of the owner. While there are some short term things you can try, improving your own credit score is the most important thing you can do. You say you destroyed your credit 6 years ago. You should have been using those 6 years to build your credit history back up. But at least it is never to late to try.

As for the loan, it depends on what you need it for. If it is for purchase of equipment, look into seller-provided finance or even a lease transaction. If it is for inventory, see if the vendor will give you credit or possibly ship some of the inventory on consignment (which means they still own it even while it is in your possession, so they don't become an unsecured creditor).

For other loans, it is usually a combination of things - friends and family (be sure you can repay it or you may permanently damage relationships that are more important than money), credit cards debt, etc...

You need to be creative and may need to split it into many smaller sources rather than one $10,000 loan.

Finally, you need to make sure that you have a really good accountant, since anyone loaning money to your business will want to know that the business is financially solid.

Good luck.
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Last edited by David Staub : 02-10-2012 at 10:25 AM.
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