If you have bad credit, you may be wondering if it is possible to start a business. These days, it feels like you need good credit to do anything in life. However, starting a business can be particularly difficult when your credit rating isn’t as healthy as it could be. The good news is, even with bad credit it’s possible to get the funds you need to set up a business. Here, we’ll look at some of the options available.
Crowdfunding
Crowdfunding is one of the newest forms of finance available to businesses and entrepreneurs. Instead of asking for funding from traditional lenders such as banks, building societies and the government, crowdfunding is open to the general public.
This means, businesses can request funding from a wide pool of consumers. The interest rates are typically much lower than they would be through a bank and having bad credit doesn’t necessarily stop you from getting the funding you need. You can use it to fund new products, set up a business or to upgrade your equipment. There’s no guarantee you’ll get the money you ask for, but many entrepreneurs have had success with this platform.
Bad Credit Loans for Businesses
An often more successful way of getting the funding you need is to take out bad credit business loans. These are specifically designed for those with poor credit. While the interest rates will be a little higher due to your poor rating, there are companies which offer more affordable rates. With this type of funding, you’ll know exactly how much you’ll be paying back each month. They are also usually offered on an unsecured basis, so you won’t need to worry about losing your assets or business if you encounter issues with the repayments.
Equipment Rentals for Your Business
If you need to purchase equipment, rather than buying it outright, there’s also the option to rent out the things you need. This can prove to be much more affordable, allowing start-ups to get the latest equipment without having to pay a large lump sum. Rental rates can vary drastically, so it’s worth comparing your options before choosing a rental company to match your requirements.
These are just some of the ways you can start a business with bad credit. No matter how poor your rating is, you’ll always be able to find one funding source you can take advantage of. Just remember to compare your options to ensure you’re making the right funding choice for your startup business.
