The importance and benefits of loans are well-known in the business community. Receiving a business loan can help take a business to new heights. With some assistance, companies can grow exponentially, but what if someone has bad credit and wants to apply for a loan?
Fortunately, having bad credit does not necessarily mean one cannot get a business loan. The information provided below will explore some of the options available for an individual who wants to take out a business loan with poor credit.
A Few General Questions
To start, it is important to address a few common and central questions about business loans.
Is There a Minimum Credit Score to Apply for a Business Loan?
There is no specific black or white answer. It depends on the type, size, and collateral of the loan. To offer context, most respected and trustworthy organizations that offer loans see below a 600-credit score as very poor and risky. Therefore, such companies will view a 600 score as an approximate minimum. There are a select few reliable companies like GoKapital that offer loans to individuals with a credit score lower than 600.
Often, the minimum can be a bit higher than 600 for a decent loan. For higher loans, credit scores will range between 670 or higher. If one has a credit score between 720 and 850, organizations will be very open to offering a loan. These clients are referred to as low-risk borrowers.
What Kinds of Companies are Trustworthy?
The loan business has a lot of players, both legal organizations and under-the-table sketchy operations. Some of the illegal companies might see an opportunity in working with a client with bad credit, so they can charge them even more with high fees.
It is important that anyone who desires to apply for a business loan uses a reliable and trustworthy organization. The client does not want to experience hidden costs or unexpected catches. Even more significantly, he or she does not want to get involved in any illegal activity.
When selecting a bank or credit union, it is imperative to carefully conduct research and plan the loan. Make sure the credit union is secure and has a positive reputation among past clients. One lender that is especially noteworthy is GoKapital.