How to Secure Business Loans With a Bad Credit History?

Business Loans

You must have heard plenty of debates regarding the pros and cons of credit cards. However, most people don’t realise that using the card wisely can improve their credit score, thus making them eligible for business loans. 

However, securing funds for your upcoming business venture can be a nightmare if you don’t have a good credit card history. In fact, over 46% of business organisations in Australia currently face a significant increase in operating expenses, thus putting them at a closure risk. 

In such cases, you can look for other viable options for bad credit business loans in Australia. Some standard examples are: 

Apply for a Business Credit Card

You can always apply for a business credit card if you cannot get a business loan in Australia due to poor financial history. You can easily do so without an employer identification number, thus offering you the freedom to start any type of organisation. However, it is essential to note that the credit history will likely result in lower credit limits or higher interest rates. 

Look into Merchant Cash Advance Loans

Primarily suited to small business enterprises, multiple financing organisations provide merchant cash advance loans to companies that accept debit or credit card payments. Here, the lender gives the borrower a certain sum of money to establish the working operation. 

Now, a portion of each customer payment is credited to the lender’s account to repay the loan. This option is ideal for most Australian business owners because it gets approved fast, and there’s no requirement for collateral. 

Get an SBA Loan

SBA stands for Small Business Administration and is the type of financial lending option partially funded by the government. As such, the risk of the lender losing all their money is significantly reduced. However, before applying for SBA, you must have exhausted all other bank loan options. Before moving ahead, you must confirm the minimum credit score required for a successful application for the SBA loan in your region in Australia. 

Try and Discover Independent Lenders

When you can’t sign up for any government schemes or meet requirements laid down by financial organisations, you can start looking for independent lenders. Doing so will help you get the required cash instantly. While assessing the risk factor, independent lenders in Australia are usually more lenient and thus likely to approve your loan. However, be mindful of the collateral needed beforehand. 

Contact Your Friends or Family Member

The concept of borrowing money from your acquaintances or loved ones as a loan is not a new concept in the Australian community. You can always reach out to the people in your circle, pitch the business plan, and put forth the demand for money. Based on the situation, you can also ask them to join your company as a silent investor, thus offering better money safety in the long run. 

Starting a new business venture is no easy feat, mainly if you haven’t used your credit card wisely in the last few years. With a poor financial history, it is quite likely that multiple banks or financial organisations will reject your business loan requests. 

In such cases, you can look for alternatives to bad credit business loans in Australia. Some standard examples are signing up for a business credit card or an SBA loan. Additionally, you can look into independent lenders or borrow money from your family. 


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