Guidelines to Get Start Up Business Loans with Bad Credit

There was a time when start ups were laughed upon and were labeled a failed venture before they even started. People couldn’t believe that they could actually start a small business with literally zero business credit and sore personal credits. But times have changed and success stories of multibillion enterprises like Google and Facebook which started out in garages and dorm rooms have inspired millions to set out their bright ideas into successful business endeavors. However the scenarios are still no different and getting bank approvals and trust to lend start up business loans despite bad credits is no easy job. Seeing every door shut upon them, many start ups die before they are even born due to financial problems and bad personal credit. But every successful business must and should have its share of difficulties and troubles to learn from bad experiences. Only those who overcome these difficulties and don’t see bad credit history as a major barrier actually achieve what they dreamt one day. With proper planning and sheer hard work any start up can get a small business loan approved. Here are a few tips that can be followed.

• Having a proper business plan will give you more clarity on what you can do and what you can expect. It also ensures the loan lender that you are capable of repaying the loan. So always have a proper start up plan and make sure you have the brains to deal with situations and not just the heart to endure. Only dreams and no plans lead to a big ‘not approved’ label on your request.

• Do your research. And by research we don’t mean reading a few articles like these and heading towards a bank. Take your time to learn as much as you can on all the small business loan options and review your credit history. Know what banks or legitimate lenders are associated with SBA (Small Business Administration) because you don’t want to knock on those doors that will never open. Start ups have constraints and you will face doors of big banks shut before you even approach them. Accept the hard fact and explore other options.

• Having a bright plan on your mind and no projections or plans printed on paper will take you nowhere. Be professional in your approach and make sure you appear as a valid contender in the world of business who won’t take no for an answer. Gather all the documents that can get you a SBA approval such as EIN number, D-U-N-S number and list your company as a corporation or LLC. Get the filing done, fill the applications and make no mistakes.

• Bad credit is the main reason why most start ups get a big no from many lenders. Work on clearing all the unpaid bills and have a decent credit score. Get personal recommendations from people and well wishers. Don’t hesitate to ask them to vouch for you (only if you are a person who can be trusted and depended on!). Present collaterals such as house details, car etc. which assures the lender that there are alternative modes for repayment.

• And above all, always remember, you are a startup and people won’t believe you entirely. So always quote only how much you need and how much you can repay. Prepare a cash flow projection to explain the lender how you are going to repay your start up business loan despite bad credit. Quoting an amount that is higher than your company’s capability is not a wise option.

When other startups can go up the ladder of success even yours can. Remember, even those start ups that you adore and respect went through the same troubles of getting their startup business loans approved like you are doing now. Bad credit history is just a phase that seems impossible but they overcame the difficulty anyway. If they can, so can you!

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