The Best Working Capital Loans with Bad Credit
Working capital is an essential component of any business, as it represents the funds required to run day-to-day operations. For businesses with bad credit, obtaining working capital can be challenging, as traditional lenders often view them as risky borrowers. However, alternative working capital loan offers are available for businesses with bad credit. Obtaining the necessary business financing quickly can be accomplished nowadays by utilizing online alternative lenders. The benefits of alternative lending outweigh the traditional business loan application process. This type of lending allows your business to find financing when you might not meet the criteria for traditional business financing. These loans are typically provided by alternative lenders willing to work with businesses with a poor credit history or lack the collateral required by traditional lenders.
Alternative working capital lending has become increasingly popular since it allows quicker access to funds with minimal to no collateral involved, minimal documentation, and simple application processes that are more favorable than traditional loans from banks. Click here to compare multiple working capital loan offers without having to pull credit.
How to get a working capital loan with bad credit?
As a small business owner, having access to working capital is crucial for growth and success. However, if you have bad credit, it can be challenging to secure a working capital loan from traditional lenders. Fortunately, there are alternatively working capital financing options available for your business. Here are some steps to follow to get a working capital loan with bad credit:
- Check your credit score: Before you start looking for a working capital loan, check your credit score. You can do this for free by contacting the credit bureaus or using a credit monitoring service. Knowing your credit score will give you an idea of the type of loan you may qualify for and the interest rates you can expect to pay.
- Explore alternative lenders: Traditional lenders like banks and credit unions may be reluctant to lend to you if you have bad credit. However, there are alternative lenders that specialize in working with businesses with poor credit. Look for lenders that offer working capital loans, and compare their interest rates, terms, and fees.
- Consider a secured business loan: If your credit is particularly poor, you may need to offer collateral to secure a loan. Collateral can be in the form of assets like equipment, real estate, or inventory. Offering collateral can make you a less risky borrower, and increase your chances of getting approved for a loan.
- Look for grants and other financing options: If you are still having trouble getting a working capital loan, consider other financing options like grants, crowdfunding, or invoice factoring. These alternatives may have different eligibility requirements and terms, but can provide the working capital you need to grow your business.
Here are some alternative lenders for the best working capital loans:
Lendio – Best for invoice financing
Lendio is an online marketplace lender that connects you to experts who can find funding to match your business needs. Lendio offers you and your business flexibility; specifically, the accounts receivable financing option is where you can gain quick access to cash by selling your purchase orders or receivables, also referred to as invoice financing. The capabilities of invoice financing allow you immediate mobility to fund your business’s short-term growth opportunities.
Bluevine – Best line of credit options
Bluevine is a financial technology company specializing in business capital loans when you need a hand or are starting to expand your enterprise. The company provides a revolving line of credit from which you can withdraw funds as needed, with no monthly fees. With minimal qualifications to get approved, you can save time from looking through the lengthy loan application requirements at Bluevine. Bluevine can find the right credit limit for your business size at any stage.
OnDeck – Best for Short-term business loans for bad credit
Speak with an expert at OnDeck’s online lending when deciding if a short-term business loan is the best option for you. OnDeck’s term loan is a type of installment that provides you with a one-time lump sum of cash to use for your business however you see fit. Get same-day funding and a transparent price after filling out the simple application.
Triton Capital – Best Equipment loan for bad credit
Triton Capital serves several industries with financing options for equipment loans to increase efficiency and expand your business’s operations. With upfront interest rates starting at 5.99% and repayment plans ranging from 12 to 60 months, Triton Capital lets you compare your options instantly.
Obtaining a working capital loan is achievable, even with bad credit, provided you follow the necessary steps. Taking the right measures can secure the financing you need to grow your business. It is important to remain proactive and patient throughout the process to increase your chances of success.
Term loans and lines of credit are the most popular alternatives to bank loans, according to the 2022 Small Business Credit Survey from the Federal Reserve.
In general, alternative business lenders are not subject to the same laws and regulations as bank lenders. Instead, alternative business lenders are regulated by a mix of federal and state guidelines — in addition to self-regulation.