Business Loans for Poor Credit

by Mack Bartlett

Starting the business is the American dream. Well, it’s my American dream. It has been since I was a young kid – probably 12. I want to run my own shop, manage my own time, and have my customers be my only boss. There’s only one problem. Starting a business takes cash – cash I don’t have. So my options are to borrow money from friends, family, or the bank. My credit is no good and my friends and family are just as broke as me – so I have to hope I can find a bank that offers business loans for poor credit.

One thing is for sure – if a bank is going to lend me any money at all given my damaged credit, I’m going to have to make a pretty compelling case that I’m not a huge credit risk, even if that’s what the statistics say about me. I think if I put the right pieces together I’ll be able to get the poor credit small business loan I’m looking for.

Number one, I need a rock-solid business plan. Before I walk in to that loan officer’s office I’m going to make very sure I have my plan and my presentation nice and polished. I’ll be able to show him that I have a product for which there is a sizable market, an intelligent and efficient plan for getting the word out about my product, and conservative but encouraging projections of cash flows during the first 12 months I’m in business. Of course I can’t elimiate all the risk the bank is taking by giving me a loan, but I’ll show them I’m willing to do whatever it takes to make my business work – I’ll give up food, sleep, and a social life in order to watch my baby grow.

Of course it won’t be easy. The vast majority of traditional banks have no interest in giving business loans with poor credit. They’re looking for people with an immaculate credit history, collateral, and even a business that’s already cash flowing before they’ll be willing to lend a single dollar.

That’s why if you’re in the same situation as me you might want to consider looking for a private lender. It won’t be easy, but if you can find a person with some decent liquidity and an entrepreneurial spirit you may find they’ll be willing to take a  calculated chance on you and lend you the money to get off the ground. At the same time, they may not see the benefit of lending you the money (since you’re considered a credit risk). If they really believe in you and your product they may only want to give you the money as an investment and take a percentage of the business in return.

However you raise the money for your business (whether it’s through a poor credit business loan or an investor), never give up on your dream. America needs more committed entrepreneurs to help our economy thrive in the long term.

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