A small business is in no way a small venture. In fact, the very essence of getting a small business going is trying to stay afloat, while spending the least money possible. Getting financed to begin with, is perhaps the biggest issue, especially if you have bad credit – it can really hold your business back. So, what does ‘bad credit’ mean? Well, essentially, it means that you have negative listings attached to your credit report, thus making lending firms and institutions far less likely to approve your requests for new loans. What’s more, a business with bad credit has a logical tendency to be labelled as untrustworthy. Here’s how to deal with bad business credit.
Check your credit report
Firstly, you should know your enemy before you start fighting it – you need to get introduced to your credit report. This will give you an outline of what might be causing your bad credit and will make it easier for you to choose the appropriate way of improving it. Coming up with the right plan is the first step towards tackling a bad credit report – a free copy is legally available to everyone once per year and also in the cases of your loan requests being declined. Coughing up some minor cash for a couple of additional copies throughout the year is always a good idea, because this will allow you to keep good track of your progress.
There is a neat trick that will allow you to render your bad credit almost completely harmless. Well, partner up with a business that has great credit, because, in this way, they can co-sign you a loan that you’re going to use to repay your debts and remove all the negative listings that might be on your record. Of course, there is a catch here, seeing as how it’s your partnering business that’s going to be repaying your loan; they will probably want to have a say in how you’re running your company and this is only natural – nobody wants to end up stuck with someone else’s loan, without some benefit.
Try using your business as collateral
One of the best ways to offset your bad credit is definitely using your business assets as collateral. Lending institutions are far more likely to approve your loan requests if you offer collateral, seeing as how this will give them something to sell if your business goes bust.
On the other hand, given that you have your legacy at stake here, this will serve as an added motivation for you to do whatever it takes to pay off your loan on time, which is why using your business as collateral is far from uncommon!
Turning to experts is never a bad idea
Negative listings are a well-known cause of many failed businesses. These, however, can be completely removed from your credit record and it’s the modern experts who are perfect for helping you deal with this. It’s only natural that you may wonder how you’re supposed to afford these experts, and you’ll be happy to learn that there is an easy way to take care of this! For example, there are businesses, such as Clean Credit, that offer you a chance to pay your fee only after the negative listings have been completely removed from your credit report!
Keep away from payday loans
Unfortunately, payday loans are the last-resort scenario that many businesses turn to in order to pay off their standing debts on time. You should definitely look to avoid this, seeing as how you’ll always end up paying more than you have borrowed; after all, this is how this type of loans pay off for the lenders!
Bad business credit should in no way be something that will stop you from turning your business idea into a success. Keep track of your credit report, establish partnerships, consult the experts, do not be afraid to use your business as collateral, but be very much afraid of payday loans!