4 Tips for Starting a Business When You Have Bad Credit

Having a poor credit history does not mean you cannot start your own business. If the time is right and you need to jump now, there is hope.

Start Repairing Your Credit

Get to work on this now. It will take a while and you want to start as soon as possible. You can still start your business in the meantime, but you have to get the credit repair ball rolling. The first step is to get a copy of your credit report and go through it thoroughly. Make note of any mistakes and inform the credit agency in writing. Then make note of the real issues and begin working to correct them. Make a plan to get bills paid on time and reduce debt.

Keep the Business’s Credit Clear

Your business will have its own credit. Start out on the right foot and keep it clean. Pay bills on time, avoid taking on more debt than needed, and keep an eye on it. If you see an error pop up take care of it right away. By doing this, you will eventually be able to obtain financing based on the credit of your business rather than your personal credit.

Related Article: 6 Easy Ways to Increase Your Business Credit Score

Alternative Financing Options

Banks are not the only lenders. Consider non-bank financing options. For example, institutional investors are now making small business financing available through online marketplace lending platforms, such as Biz2Credit.

Low Credit Business Loans

When financing is the way to go, there is such a thing as a low credit business loan. The terms and interest rate are not going to be as favorable as with a more traditional loan, but you will be able to start your business just the same. Keep tabs on your credit and your business’s credit, and as things improve be certain to refinance for better terms and rates.