3 Low Credit Score Business Loans for Entrepreneurs

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3 Low Credit Score Business Loans for Entrepreneurs

Three low credit score business loans give entrepreneurs fast access to working capital, so that missed opportunities can become a thing of the past.

Low Credit Score Business Loans – 3 Business Finance Tools Provide Fast Access to Working Capital

Business opportunities can pop-up quickly and disappear just as fast for entrepreneurs who lack the working capital required to take action. There’s nothing more frustrating than the feeling that you are sitting on the sidelines while someone else is taking advantage of a great business opportunity. When lack of working capital is the cause, these three business finance tools might help.

In 2013, a Forbes Entrepreneurs article cited several reasons why now may be the best time ever to be an entrepreneur launching a startup or growing a small business. One of the advantages enjoyed by entrepreneurs and small business owners today is a relatively low average cost of starting a new business. For entrepreneurs on the lookout for business opportunities that can help them grow quickly or to expand their business, prospects abound.

For cash-strapped startups and small businesses, an abundance of growth opportunities could become a source of frustration instead of excitement when lack of working capital makes it impossible for a small business owner to get in the game. An entrepreneur.com article looking for answers about small business owners access to capital reports that 35% of small business owners said they couldn’t access adequate working capital in 2013.

That equates to roughly 8 million small businesses being in a position where they are probably going to be unable to invest in growth, even when great opportunities present themselves. Benefitspro.com shared numbers that painted an even less favorable picture, saying that, “In July 2013, 65 percent of NSBA members responding to a survey reported that they were unable to obtain adequate financing for their businesses. By December 2014, that had increased to 69 percent.”

Low Credit Score Business Loans and Business Loan Alternatives

Traditional bank loans are not the only business loans available to small business owners today. In fact, non-traditional low credit score business loans (such as short term business line of credit loans) and business loan alternatives like merchant cash advance and business cash advance programs can usually put working capital into the hands of small business owners more often, and more quickly, than traditional business loans can. The table below provides a quick checklist of some of these alternatives:


Characteristic Bank Loans Line of Credit Merchant Cash Advance Business Cash Advance
Length of process from application to approval Weeks or longer Minutes or hours 24-48 hours 24-48 hours
Length of time from approval to funding Varies Instant 3-5 days 3-5 days
Fees or interest rates Varies, save by repaying more quickly From
1-13%, save by repaying more quickly
Fixed amount Fixed amount
Application fees, including due diligence fees Varies None None None
Low credit score disqualifies an applicant Yes No No No
Collateral usually required to secure financing Yes No No No
Paperwork and financial statements required 2+ years 6 months 6 months 6 months
Funding fees Varies No No No
Repayment Set monthly payment or monthly payment + balloon payment Flexible Automatic as small percentage of debit and credit card transactions Automatic as a small daily ACH debit
Length of repayment schedule From a few to several years Flexible depending on draws against the line Usually from 6 – 15 months Usually from 6 – 15 months

Speed of application processing and funding are two big reasons that small business owners should consider alternates to business loans like the business finance programs described above. Other factors that might make our alternatives preferable include the fact that they are low credit score business loans that banks are generally unwilling to fund.

Similarly, while banks want a business to provide several years of history and prove that they have collateral to secure a loan, these  working capital financing solutions can be obtained by businesses that have been in operation for as little as 6 months. Since they are based on sales trends, no collateral is required to secure funding. Unsecured low credit score business loans and financing solutions with no UCC filing are often a big plus for small business owners who want to limit their financial risk.

Working Capital Financing with a Business Line of Credit

We offer business line of credit financing through a partnership with Kabbage, the #1 provider of online low credit score business loans. With no cost to apply, no hidden fees and no surprises, it’s no wonder that they have an A- rating with the Better Business Bureau. Apply for a business line of credit online and in as little as 7 minutes you might have an approval plus instant access to your line of credit. Draw up to once daily, take only what you need and pay fees only for what you take.

Working Capital Financing with a Merchant Cash Advance

Merchant cash advances are not business loans, but they, too, operate as working capital financing that can give small business owners access to capital needed to take advantage of growth opportunities or address short term cash flow challenges. Merchant cash advance amounts are based on an organization’s average monthly credit and debit card sales, and are repaid, automatically, as a small percentage of future card transactions by the card processing company.

Working Capital Financing with a Business Cash Advance

Like merchant cash advances, business cash advances are also based on an organization’s sales trends. But instead of only considering card transactions, a business cash advance amount is based on total average monthly sales. It is repaid automatically, usually as a daily or weekly ACH debit.

Ready to apply? Request a free, no-obligation low credit score business loan proposal and we’ll go to work sourcing offers for you right away.

Request a Free Financing Quote

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