As a small-business owner, you need access to capital to fund your business.
One way to access capital is through a small-business loan.
For business owners with bad credit, getting a traditional bank loan can be very difficult.
However, alternative lenders offer multiple funding options for those with bad credit.
How can I get a business loan with horrible credit?
If you want to manage your cash flow and working capital, a line of credit is your best option. To qualify for OnDeck’s term loan, you must have a personal credit score of 500 or higher. For a line of credit, your personal credit score should be at least 600.
Does a business loan show up on your personal credit report?
Anytime an owner personally guarantees a business loan, there is a possibility that the loan could show up on his or her consumer credit reports. If, as a business owner, you personally guarantee a business loan and you default, then the lender will often report the default on your personal credit reports.
What kind of credit score do you need for a small business loan?
Generally, however, you need around the following minimum credit scores to be approved for each type of loan: SBA loan: 640+ Bank loan: 640+, but the higher the better. Short-term loan from an alternative lender: 550+
Do you need credit for a business loan?
To qualify for a small-business loan, you may have to provide collateral to back the loan. SBA loans require “adequate” collateral for security on all loans, plus a personal guarantee from every owner of 20% or more of the business. A personal guarantee puts your credit score and your personal assets on the hook.
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