Getting a loan can be a terrible experience when you have bad credit. That is, of course, unless you for some reason really like being rejected all the time. However, it doesn’t have to be like that and you can still get a sizeable loan to cover up your finances in a rough period even when your credit is in bad shape.

Asking those closest to you

If you don’t like the idea of borrowing money from your friends or your family, it’s understandable. No one really enjoys doing that, but at times it can be a really great alternative to the traditional bank loan. At the end of the day, damaging your pride might be better than losing your house, especially if you have a family to support and take care of. Personal loans like these also offer the unique advantage of not being penalized (theoretically) if you miss a deadline or you run a little late.

Secured loans

The idea small loan for your business would give you a sizeable amount of money, with convenient interest rates and plenty of time before you need to pay it back. However, unless you live in a perfect world for people with bad credit, that’s not going to happen. What could happen though, is you getting a secured loan. This type of loan will get you the money you want in exchange for a guarantee. This guarantee comes in the form of collateral, which represents assets (personal or company owned) which will be taken away if you fail to meet payment deadlines. The consequences of missing a payment are far greater, but at the same time you also get access to bigger and better loans that would have never have happened otherwise, especially not with your credit score.

Thinking outside the box

Understanding how to get a small business loan with bad credit is all about thinking outside the box. There are multiple cash sources that you could look into, which might offer you a saving solution. Here are some of the most practical and efficient ways to get a loan when you have bad credit.

Looking into government funding

There are many programs and projects that are available for small businesses. If your business needs some help, you might not even have to get a traditional loan at all. These programs are government funded and anyone can tap into them. Checking to see if your area has such projects available for young entrepreneurs is a really smart move. Additionally, you should check if there aren’t any nationwide or international programs you could tap into and benefit from.

Using peer to peer loans

Peer to peer loan websites are dedicated to those that are looking for loans and those that are able to provide such loans. It’s not as secured as a bank loan, but the idea is that you can find a loan opportunity with a much lower interest rate thank at a bank. Additionally, having bad credit doesn’t matter as much as it does in a bank environment. It’s an option worth looking into if you have bad credit and need a loan.

 

Published by sandeep Malik