I have bad credit what are my financing options?
Most commercial banks will shy away from clients with credit problems. However, there are organizations that specialize on clients with bad credit, no credit, or with a short credit history. These lenders have the most flexibility when lending and their loans usually carry a higher interest rate. These institutions lend lower amounts and in most cases require a person have a business plan.
Bellow is a list of Alternative Lenders:
• ACCÍON New York www.accionnewyork.org • BOC Capital Corp. - Business Outreach Center Network www.bocnet.org • Count Me In www.count-me-in.org • National Minority Business Council www.nmbc.org • New York Association for New Americas – NYANA www.nyana.org • Project Enterprise www.projectenterprise.org • Trickle-Up Program www.trickleup.org • Women's Venture Fund www.womensventurefund.org
Although good credit is an important factor for getting a loan, it is not the only factor. If you don’t have perfect credit, you can mitigate it by providing a thorough business plan, collateral, a higher co-investment in the project, a cosigner, etc. You will have to explain any outstanding issues with your credit. Moreover, lenders have different appetite for risk (large commercial banks are usually more conservative), so you may be able to find a lender that will work with you.
It is better to clear up problems with your credit before applying for a loan because the bank will give you better rates and terms.
