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How to Get a Business Loan with Bad Credit

Just as the sub-prime mortgage collapse triggered the global financial crisis of 2008, corporate borrowing is thought to pose the next big threat to established economies such as the UK and the U.S.


Heavy borrowing is also impacting on small and medium-sized businesses, who are looking to take debt as a way of growing their ventures in a strained economic climate.


This is easier said than done for companies with a poor credit history, however, who can often struggle to source funding in this instance. With this in mind, here are some borrowing options that may help you to achieve your objectives:


  1. Seek Out a Bad Credit Loan


Whilst conventional lenders may be loath to help you out in instances where you have a poor or inadequate credit history, there are specialist service providers that tailor their products specifically for such firms.


Take Liberis, for example, which have created a number of funding options for applicants regardless of their credit history.


This range includes credit cards and loans, so businesses can seek out viable products that suit their circumstances whilst providing them with a sustainable source of credit.


  1. Equity Crowdfunding


Equity crowdfunding is another viable option for businesses with a bad credit history, as this enables firms to source investment by offering a share in their venture in exchange.


This partially negates any potential credit issues, as investors can secure physical equity in your business at a predetermined value. This is essentially a form of collateral, and one that enables investors to secure a viable return in the future.


Of course, to secure investment you’ll need to boast a profitable business model and one that’s scalable over time. Having a clearly defined business plan also helps, as this allows individuals to make a more informed decision on the longevity of your venture.


  1. Invoice Financing


We close with invoice financing, which is one of the most accessible and seamless ways through which businesses can secure investment.


In simple terms, this enables companies to sell their accounts receivable to third-party investors, in order to secure instant cash injections against 30, 60 and 90-day invoices. This helps to maintain the ideal level of cash flow that small businesses crave, and it can often make the difference between successful and failed startups.


This also creates a short-term debt cycle, and one that can be settled when your customer settles their original invoice.