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Question
How do you start a business with bad credit?
I'm looking into starting my business this year. To prepare for that, I'm currently paying all my bills and should be complete by early summer. I know it's not going to show automatically nor my credit score going to improve, but what are my chances of getting a good business loan with a bad credit score BUT all my bills paid off (and shown on the credit report)?
7 months ago - 1 answers
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You may find a tough time getting a loan from financial institutions with poor credit, even from SBA. SBA requires a number of factors to avail of their loans, and one of them is good credit history Having good credit is just one requirement for business loan. Banks and SBA want you to have collateral as well as equity investment in your own business. Banks want to make sure they can get the money they loan you -- if you cannot pay because the business failed, they will get your collateral If you don't have collateral and your credit remains poor, you may want to look for other sources of funding. If you cannot get loans, try to get a loan from your parents, family and friends. If they cannot give you any, use your credit card. Credit card requires no collaterals but are an expensive source of funds. Otherwise, either downscale your plans and amount of capital needed; or wait until your financial situation improves. I suggest you read the following books as well. Borrow them from your library or buy them from your favorite bookstore - No Cash, No Fear: Entrepreneurial Secrets to Starting Any Business with No Money by Terry Allen - Starting on a Shoestring: Building a Business Without a Bankroll by Arnold S. Goldstein - The Art of the Start: The Time-Tested, Battle-Hardened Guide for Anyone Starting Anything by Guy Kawasaki
by imisidro
7 months ago
Asker's Rating: 