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3 Ways to Get Good Small Business Loans with Bad Credit

by Neal Frankle, CFP ®, The article represents the author's opinion. This post may contain affiliate links. Please read our disclosure for more info.

There are 3 ways you can get an inexpensive small business loan with bad credit. Before you do anything, it’s important to know what your credit score is.

1. Know your credit score.

Your score means different things to different lenders. The better the score, the more available money will be. Know what it is and do everything you can to correct any credit report errors. It’s not that tough and you can do it yourself for free.

2. Expand your choices.

According to Entrepreneur.com, only 25% of small business loans come from banks and credit cards. That means there is a lot of money that funds small businesses coming from other sources.

One of those sources might include friends and family. If people know you to be a responsible person who does what she says, they’ll be happy to help you along your way. They want to see you succeed. Show them your business budget and plan. Share your dream with them. They might surprise you with their support.

Another way to expand your choices is to slow down. There are tons of bad credit lenders out there who love people like you – because they know you are desperate, have few choices and need the money fast. As a result, they’ll rake you over the coals and charge you sky-high interest rates.

But you can do a great deal to disarm these predators. Try to lengthen your timeframe. If you need a car to make deliveries, do you have to buy one today? Can you borrow your brother’s extra Chevy for a few weeks instead? Think of tactics like this to give yourself some breathing room. If you do, you’ll save a bundle. If you can reduce the pressure to get the money quickly, you expand your options and reduce your cost.

3. Peer-to-Peer

I’m a huge fan of peer-to-peer lending. There are a number of companies out there who put people who need money together with people who have money to invest. The rates they charge are often much lower than bad credit lending firms. Why? Because each firm sees and understands different things about you based on the credit score.

Don’t assume that just because you have a bad credit score, everyone is going to treat you the same. Each company has underwriters who are actually human. They interpret your credit history differently, so take advantage of it.

Peer-to-peer lending is often a much better choice than bad credit lenders and payday lenders.

They work on volume and they facilitate loans of all quality. The people who just do bad credit loans need to make lots of profit from each loan they make because they only do bad credit loans. The peer-to-peer lenders deal with private people who just want to be fairly compensated for the risk they take. These people aren’t predatory and they aren’t dependent on squeezing every last dime out of you.

What are other sources of small business loans if you have bad credit?

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  1. Mike says

    November 19, 2010 at 8:39 PM

    It’s so important to present yourself, your business model and your financial statements as attractively as possible.

    Reply

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Who is Neal Frankle

Neal Frankle

I'm a CERTIFIED FINANCIAL PLANNER™ Professional with more than 25 years of experience. I feel very blessed and hope to share my personal financial experience and professional wisdom with readers of WealthPilgrim.
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Retirement financial education for people age 55+ seeking to retire well and for those retired seeking to enjoy a better retirement.  We discuss retirement planning, retirement investments, taxes in retirement, retirement spending, IRA and 401k distributions and we will personally answer questions that you pose in the video comments.

While so much financial information is about preparing for retirement, what about managing your finances in your retirement years? That's exactly what we cover at Retirement Crusaders.

Neal Frankle is a retired registered investment adviser. Larry Klein is a retired financial advisor and retired CPA. They have 70 years of financial advising experience to share so that you have your best retirement years.

Retirement financial education for people age 55+ seeking to retire well and for those retired seeking to enjoy a better retirement. We discuss retirement planning, retirement investments, taxes in retirement, retirement spending, IRA and 401k distributions and we will personally answer questions that you pose in the video comments.

While so much financial information is about preparing for retirement, what about managing your finances in your retirement years? That's exactly what we cover at Retirement Crusaders.

Neal Frankle is a retired registered investment adviser. Larry Klein is a retired financial advisor and retired CPA. They have 70 years of financial advising experience to share so that you have your best retirement years.

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Retirement financial education for people age 55+ seeking to retire well and for those retired seeking to enjoy a better retirement.  We discuss retirement planning, retirement investments, taxes in retirement, retirement spending, IRA and 401k distributions and we will personally answer questions that you pose in the video comments.

While so much financial information is about preparing for retirement, what about managing your finances in your retirement years? That's exactly what we cover at Retirement Crusaders.

Neal Frankle is a retired registered investment adviser. Larry Klein is a retired financial advisor and retired CPA. They have 70 years of financial advising experience to share so that you have your best retirement years.

Retirement financial education for people age 55+ seeking to retire well and for those retired seeking to enjoy a better retirement. We discuss retirement planning, retirement investments, taxes in retirement, retirement spending, IRA and 401k distributions and we will personally answer questions that you pose in the video comments.

While so much financial information is about preparing for retirement, what about managing your finances in your retirement years? That's exactly what we cover at Retirement Crusaders.

Neal Frankle is a retired registered investment adviser. Larry Klein is a retired financial advisor and retired CPA. They have 70 years of financial advising experience to share so that you have your best retirement years.

YouTube Video UCoU0buhwVplzXrsyf342nOg

Retirement Crusaders

June 10, 2022 1:19 PM

Subscribe
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