Loans Canada Launches Free Credit Score Portal And Is Recognized As One Of Canada’s Top Growing Companies
Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
At some point in a business’s life, it will need financing to grow, restructure, or develop. While adapting and changing is always good, the downside is you usually need good credit to get approved for a business loan, especially with banks and traditional lenders. If you don’t have the best credit, applying for a business loan can seem daunting and intimidating leaving you feeling discouraged.
Fortunately, the road doesn’t end there. You do have options and you do have the opportunity to achieve your business goals. All you need to do is find a lender that will work around your credit issues. To learn more about bad credit business loans, how to obtain one and how you can improve your credit, continue reading below.
When you apply for a loan, lenders consider your credit score and your business’ credit score, but they also look at so much more. In terms of your personal credit score, the credit score range is between 300 and 900. In terms of business credit scores, the range is from 100 to 900. The lower you are on this scale, the worse your credit will be.
There isn’t really a magic number that is considered to be bad credit because each lender has differing perspectives and requirements. For personal credit scores, a good rule of thumb is 650, anything lower than this number is generally perceived to be poor or bad credit. On the contrary, there isn’t really a benchmark for business credit scores as lenders consider much more than merely the credit score and each lender has different requirements.
Unfortunately, with bad credit, you won’t have access to all of the different types of loans under the sun. Most lenders that work with borrowers with bad credit offer two types of loans: retail merchant advances and business term loans. Both of these loan types are approved based on monthly sales of your business as opposed to credit scores. Let’s explore what these are in-depth below.
The total amount of your loan is based on your monthly credit card sales. The loan is repaid daily based on a set percentage of your daily sales. As an example, you choose to borrow $5,000 and repay it with 10% of your daily sales. This type of business financing is one of the most flexible solutions available to business owners and can complement your business operations nicely.
A business term loan is ideal if you’re looking to borrow more money for a larger project since retail merchant advances are typically for small amounts. The following are common requirements: have been operating for at least 6 months, Canada-based business, monthly credit card sales higher than $40,000, not a home-based business and not an e-commerce based business. These types of loans don’t require collateral and repayment terms can be flexible to suit your needs. However, interest and fees will be applicable to the loan.
If you have bad credit, you’ll be perceived as a high risk in the eyes of lenders. Interest rates are based on the amount of risk the lender is taking which means that the worse your credit is, the higher your interest rates will be on financing.
You might feel discouraged if you have bad credit, but there are things you can do to improve your chances of approval and to get better terms and conditions. Besides avoiding common business loan application mistakes, below is a list of things you can do to better your situation before applying.
The great thing about bad credit is there is no such thing as forever credit. There are many things you can do before submitting an application to improve your credit score. Keep in mind that it can take several months for your actions to reflect on your credit score. Below are ways you can improve your credit score.
Alternative lenders like Borrowell are an excellent option for individuals who need financing with bad credit. Because they work with bad credit, their requirements are significantly different from a bank or other traditional lenders. Let’s explore what alternative lenders consider in their applicants for business loans below.
It can be easy to get discouraged with bad credit, but the reality is you have options. The main objective for you will be finding a lender that is willing to work with your situation. Loans Canada can help match you with a lender who works with a wide variety of business owners regardless of their credit.
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Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
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