Obtaining a Business Line of Credit Even When You Have Bad Credit

As with personal finances, you’ll need to have good credit to get a business line of credit. If your credit is in question, however, don’t give up. You do have some options. The first thing you must do is swallow your pride; you won’t get anywhere if you walk into a financial institution and demand a credit line. Then, follow these steps to help you obtain credit for your business.

Call Upon an Expert

Don’t attempt to secure a credit line with bad credit without consulting an expert first. Hire a CPA to go over your books and get your business on the right track. These professionals can offer you advice on how to overcome your business’ financial shortfalls, clean up your books, produce the required financial reports, and help correct any errant marks on your business credit report.

Tell it Like it Is

Once the accountant has had a chance to get your books in order, it’s time to go out there and begin your efforts to secure a business line of credit. As you approach each lender, be prepared to be 100-percent honest about why your credit is poor. Don’t try to fudge numbers or make excuses. If you made mistakes, own them. Lenders respond much better to honesty, especially if you take the time to document the reasons for your poor score and how you plan to rectify it.

Seek Alternatives

If you’re rejected anyway, ask if there are any other options available to you. You can even seek advice on how to produce a stronger credit application for the next lender. The rejecting institution might not only offer you some tips on your loan application, but also recommend other lenders who might be more willing to work with you. The bottom line is it can’t hurt to ask for pointers and recommendations.

If you still cannot secure the credit you need via traditional methods, there are alternative funding options available to most business owners. If you have strong accounts receivables, you may be able to leverage your outstanding invoices for cash. Other options include the SBA, which offers loan and grant programs, and borrowing the funds you need either from people you know or crowdfunding.

No matter what, don’t give up. You can secure a business line of credit for your venture if you keep an open mind and are honest about your situation. Inevitably, there will be somebody willing to help you, so keep moving forward in proving your credit worthiness and improving your overall score.