So, you’re looking for some funding to grow your business, but the loan officer at your long-trusted bank isn’t too pleased with what he’s discovered on your credit report. As it turns out, you’ve had some past troubles making timely payments to your creditors. Perhaps, you’ve even defaulted on a previous loan. Such situations will make it pretty difficult for you to be approved for a business loan.
To banks, bad credit is bad news.
They’re afraid to lend any money to people who have histories of not being able to pay back what they’ve borrowed. It’s hard to blame them, we suppose. But then again, that perspective isn’t entirely fair. Maybe you encountered a personal life trauma, medical emergency or unexpected event that prohibited you from staying on top of your payments. Having bad credit doesn’t mean you’re a bad person!
What can you do to better your credit?
In most cases, this is the first step a lender will want you to take. If you have bad credit, it’s best you start working on improving it. As far as loan officers are concerned, this would represent a show of good faith. According to the Business Development Bank of Canada, among the various strategies you can use to improve your financial situation, paying your bills on time should top the list.
“It is essential to pay your bills on time—just one 30-day late payment can have a significant impact on your credit score,” explains the BDC, “Paying off the full balance of your credit card each month, using your credit limit wisely—no more than 30%—and keeping the number of loan requests you make to a minimum are all winning tactics when it comes to rehabilitating your credit history.”
Make sure the rest of your application is stellar.
Okay, so maybe your credit history isn’t the greatest. But are you still in debt? Are you making good revenue at your business? Do you maintain a good cash flow? Highlighting the positive attributes about your business and showcasing that you know how to make money are great ways to help improve your chances of securing business funding from a bank.
“Lenders want to see that your debt is under control,” explains Chad Otar on Business.com, “Lenders want to see that your revenue is high and growing consistently. Your revenue is what you’ll use to pay them back, so they need to see that you have the ability to do that…Cash flow needs to be two things: high and well managed. You can’t have low cash flow but spend it well, or have high cash flow but consistently blow it all. Lenders want to see that you not only have it, but that you’re smart with it once it’s in your hand.”
What the easiest way to secure business funding when you have bad credit?
Synergy Merchants’ unique merchant cash advance program doesn’t even take your credit history into consideration! As a result, Canadian business owners who have bad credit and have had their loan applications denied by their banks utilize our innovative funding alternative.
To get a free, no obligation quote for a merchant cash advance, please don’t hesitate to call Synergy Merchants at 1-877-718-2026 or email us at firstname.lastname@example.org. No credit check is necessary!