If you are a small business considering a bad credit history loan, then I would like to give you some tips to make your search easier.
First, you should know that there are bad credit loans available for all credit types. Even if you have a bankruptcy in your past, you can still qualify for one of these loans. Not every lender offers them but there are more bad credit loans available today than ever before.
Which Is Better – Secured Loans Or Unsecured Loans?
Many lenders only offer secured bad credit loans. The reason is that these types of loans hold more risk for the lender than other types of loans and the lenders want to reduce that risk by having you put up some type of collateral. Different lenders offer different options for the types of collateral that they will accept. Most lenders accept hard assets as collateral while some will accept real estate.
One benefit to applying for a secured loan is that you can often apply for a larger loan amount. There is also the added advantage of lower interest rates and fewer additional costs than with unsecured loans.
Unsecured loans will require much more in the way of credit checks and references than secured loans. Because there is so much risk to the lender with unsecured bad credit loans, these loans are much harder to get. If you feel that this is the loan for you, you should look to the Small Business Administration for additional help and information.
Find The Right Lender
Do not just go to your local bank unless you are positive that you can get a bad credit loan with exceptionally good rates. You should look at multiple lenders and compare them to see who has the best rates and terms. Also compare the additional fees for each lender. Some may only require documentation fees while others require application fees, closing costs and more.
Improve Your Chances Of Approval
Regardless of whether you want to apply for a secured bad credit loan or an unsecured one, take the time to learn what types of documents lenders will want to see. Most will require personal and business financial statements, credit reports, bank statements and more. Have those documents ready before you apply and you will increase your odds of getting approved.
Use Your Bad Credit Loan To Improve Your Credit
Once you get your bad credit history loan, be sure and make your payments on time every time. Making your payments responsibly will go a long way to improving your credit profile and giving you access to other loans in the future.