Despite what you might read on the internet, there isn’t a “best time to start a business.” You can start a business at any time you want, regardless of how good or bad the economy might be, and enjoy success.
You can also start a business no matter how good or bad your credit might be. It might not be easy to acquire financing if your credit score is in the tank—but it’s not impossible to do!
The key to getting your hands on the financing you need to kickstart a startup company is looking for it in the right places. When a traditional lender says no, there are so many other ways to find the money you’re looking for.
Here is how to acquire financing for your startup with bad credit.
Ask Family Members or Friends for a Loan
Do you have family members or friends who might be able to afford to float your startup a loan so that you can get it off the ground?
Your first course of action should be to speak with them about borrowing money for your new business. It’s the easiest way to acquire financing for a startup even if you have bad credit.
That doesn’t mean that there aren’t going to be challenges that come along with taking this approach, though. It’s very uncomfortable asking someone that you know to lend you money that you don’t have to jumpstart your business.
You can make things less awkward by putting your best foot forward when you request a loan from a family member or friend. You should present them with a complete business plan and talk to them more about what your business is all about.
You want the passion that you have for the project you’re working on to come across loud and clear. It should be so obvious that your family members or friends can’t help but feel passionate about it themselves.
Just be careful about how much money you borrow from family members or friends. The last thing you want to do is put a strain on your relationship with them because of a business loan.
Talk to an Angel Investor About Investing in Your Company
The family member or friend who steps up to provide you with the funding that you need for your startup is technically an “angel investor.” An angel investor is anyone who helps provide an up-and-coming entrepreneur with the financial assistance they need to get things moving in the right direction for their startup.
But more than just your family members and friends can serve as angel investors for you. There are also upwards of 300,000 other angel investors out there waiting to bank on the next big idea that they hear.
Do whatever it takes to get the idea that you have for a startup in front of as many angel investors as you can. You can find at least a few options in your area and figure out a way to get them a copy of your business plan.
Oftentimes, angel investors don’t care about a person’s credit score when they’re trying to start a company. They only care about how good of an idea that person has for their startup.
See If Working with a Microlender Will Work for You
About 35 years ago, a man from Bangladesh named Muhammed Yunus agreed to give a woman living in poverty a small loan so that she could begin making bamboo stools to support her family. In doing so, he helped start a movement of so-called “microlending.”
Microlending is a financial concept that refers to microlenders giving out small loans to those who need them most. They’re often reserved for entrepreneurs who have great ideas but no funding to execute them.
Microlending is different from traditional lending in that the whole goal isn’t for a microlender to make a lot of money off the transaction. Instead, the goal is for the microlender to help a business owner develop an idea and see it through to the end.
Today, there are plenty of microlenders out there who would be willing to consider extending a helping hand to you. They’re great for those who want to work with a lender that is invested in their success.
Apply for One of the Loans for Bad Credit
If you have bad credit, you might not think that applying for any kind of regular loan would be an option. You’ve probably been turned down for these types of loans in the past and don’t see the sense in applying for another one.
But don’t give up! When you read this article, you’ll discover that you can acquire financing from lenders that give out loans. “Bad credit loans” have become quite common among those in the business world.
You won’t have to worry about a lender looking up your credit score when you apply for one of these loans. As long as you fulfill some basic requirements (be between 18 and 65 years old, have a job and a bank account, etc.), you can qualify for them.
These loans will make it easier for your startup to grow and flourish during your first few years. They’ll also help you avoid having to use any of the other options mentioned here.
Acquire Financing for Your Startup Today
Have you been trying your hardest to acquire financing for your startup in recent months without success? It’s time to try something new so that you can find funding for your company.
Take the suggestions that we’ve presented to you and run with them. By talking to your family and friends or finding out more about bad credit loans, you can make the future a little brighter for your startup.
Would you like to learn more about the other steps you can take to get your startup off to a great start? Read our blog for additional tips on starting a small business and making it grow.