If you have a small business, you have need of business credit, and you will need to get a small business loan from time to time. Unfortunately, this can be difficult with a bad credit score. However, if you’re trying to get your business running at maximum efficiency, you’ll need to get those loans. It can seem like a Catch-22.
You can’t improve your credit score without loans, but you can’t get loans without a good credit score. However, there are ways to get a small business loan with a bad credit score.
The Small Business Administration
Your first stop should be the SBA, the Small Business Administration. The SBA does not extend loans themselves, but they can help you find the loan you need and provide other resources and advice for small businesses. They can assist you in locating grant opportunities and finding lenders who are appropriate for your particular business situation.
Secured Credit Card
You can start to build your credit back up by getting a secured business credit card. This is a credit card that you secure with collateral, so that there is no risk to the lender. You can use this card to show that your business is capable of managing credit effectively. Once your credit has been built back up enough, you can apply for more loans.
Building and Monitoring Credit
Whenever your credit improves, it’s an opportunity for you to get a needed loan. That’s why you should be sure to make regular payments on all your existing bills and loans, as this will improve your credit score. You should also sign up for credit monitoring, so that you can be alerted right away when your actions affect your business credit profile.