Welcome to First Union Lending! Today we’re talking about five financing options for those small businesses with bad credit.
Is your credit score low? A low credit score can make it challenging to get a small business loan, but there are still plenty of financing options for those with bad credit.
Option #1 Line of Credit
A line of credit works like a credit card in that it allows you to borrow money when you need it up to a preset limit. You can repay it immediately or over time but be sure to watch out for high-interest rates and other fees included in your terms.
Option #2 Merchant cash advance
This option is for those businesses that deal with credit card sales. It analyzes past revenue to determine how much money to advance your business and payments are taken out of future sales. The better you’re doing, the more you will pay back, so it is among one of the more expensive options.
Option #3 Short-term loan
This option offers a loan in a lump sum and can range in length from 3 to 18 months. Applying with online lenders like First Union is easy, and you can receive funding as quickly as in a day.
Small businesses across the country utilize short-term loans in a myriad of ways. Here are some things you can use a short-term loan for:
- Hire more personnel
- Launch a new product or a new marketing initiative
- Move into bigger office space or warehouse space
- Perform repairs on your existing workplace
- Get through a difficult financial period, especially if you are a seasonal business and have slower sales times than others
Option #4 Invoice Financing
This option works by using your accounts receivable to get the funds you need. As long as you have reliable customers with a history of on-time payments, the lender will offer a cash advance on outstanding invoices. You can receive about 75-80% of the value of the debt upfront.
At First Union Lending, we offer our clients invoice factoring, a similar service to help business owners acquire the funds needed by selling inoved to a third-party or factoring company for a lump sum of cash. Click here to learn more about our invoice factoring services.
Option #5 Equipment Financing
If you are looking to purchase equipment, this is a good option for those with poor credit. Your credit score will most likely be overlooked since the equipment becomes collateral for the loan. Because of the emergence of alternative lenders, like First Union Lending, there is more flexibility for qualifying for various loan products. We are here to help your company grow- good credit or bad credit.
First Union Lending is Ready to Help!
First Union Lending offers numerous financing programs designed with small businesses in mind. Our business loans are fast and flexible, with financing options ranging from $5,000 to 2 million dollars.