How to Get High Risk Business Loans with Bad Credit

Access to a solid source of capital as needed is crucial for any business to grow and expand. Every business is unique, and so the best type of business loan that would benefit a company most varies depending on the needs and goals of each individual business.

However, for businesses with bad credit, the financing options that perfectly match their needs are often considered “high risk business loans” by banks and traditional lenders, and denied their chance for success as a result.

The Good News:

Alternative business lending offers new and exciting opportunities for businesses to easily secure their business loan of choice, without the traditional emphasis on risk.

Read on to find out how to secure high risk business loans, regardless of credit score and extensive financial history.

5 Steps to Apply for High Risk Business Loans with Bad Credit

  • Step 1: Determine How Much Money You Really Need
    Business owners often make the mistake of seeking financing options with the longest terms, and the largest loan amounts, such as SBA loans. While this is ideal for some, for others, these options can wind up hurting more than helping. 
    If you are seeking funding for small, short term goals such as hiring staff, or purchasing equipment, high risk business loans may not be the best option for your business after all. Determine how much money you really need, and consider alternative options with less risk that don’t depend on credit score to avoid paying off unnecessary amounts of capital well into the future.
  • Step 2: Create a Solid Business Plan
    Prepare a well-thought-out business plan that clearly details how you plan on using your borrowed capital. Take your time exploring your financing options, and plan a repayment method that best fits your business model. Proper planning, mapped expenses and repayment strategies won’t only make it easier on your business financials looking ahead, but also make lenders feel comfortable with giving you cash by showing them exactly how you plan to use borrowed funds.
  • Step 3: Consider Your Ability to Leverage Assets
    Traditional lenders have been known to scheme their clients into leveraging their personal and business property, including their cars, home, and their businesses themselves as collateral for what they consider to be “high-risk” situations.If you are in a position where putting your personal and business assets at risk of being taken away is not an option, consider alternative financing options that do not require collateral, such as business lines of credit, and merchant cash advances.
  • Step 4: Pitch Your Idea
    Every business owner knows the importance of first impressions. Lenders want to know that their capital is going to be used to achieve positive results. Pitch your goals in a way that excites lenders about how you plan to use their capital to improve your company. Demonstrating passion for your business with a pitch that provides clear insight as to how you’re going to use your lender’s capital—and how you plan on paying it back—is extremely important when applying for high risk business loans.
  • Step 5: Seek Guidance From an Expert Business Financing Advisor
    As a business owner, you know your company better than anyone else. While you may know what kind of business financing you’re looking for, a little help can go a long way.Consult with a business financing advisor such as those at National Business Capital to get expert insight as to which type of business loans would benefit your business most. Get a second opinion, and save yourself time, money and stress along the way.

How to Get High Risk Business Loans

Here’s what you need before you apply for high risk small business loans:

  • 6 Months in Business
  • $100K in Annual Gross Sales
  • NO Minimum FICO Required
  • NO Collateral or Personal Guarantees Necessary

All you need to do is contact NBC’s team of business financing advisors at (877) 482-3008 to ask how they can help you get the business loan of your choice.

Or, fill out this 1-minute, 1-page application to get approved in as little as 24 hours or less.

Alternative business financing companies like NBC don’t base approval purely on FICO and annual sales, the way that traditional lenders do. Where banks see “risk,” National finds opportunity. 

Instead of assessing “risk,” NBC examines the bigger picture when it comes to financing approval. Alternative methods allow for companies like NBC to evaluate their customers based on their business’s ambition, and goals for growth.

Consider These Alternative Business Financing Options

Even if you manage to secure a high risk business loan as a business with bad credit from a bank or traditional lender, their demand for stellar credit often result in terrible loan terms and unreasonable underwriting.

On the other hand, alternative business lenders like National Business Capital do not approve their clients based on their credit scores or financial history, but instead focus on the bigger picture, and the value of their clients’ businesses as a whole.

Additionally, the alternative lending space allows NBC to offer business financing options unavailable at banks anywhere else, including:

  • Small Business Loans: The most popular type of business financing among all small business owners with bad credit, due to its incredible speed to funding, and its highly customizable nature. Choose from fixed or flexible repayment schedules, term lengths between 6 months to 10 years, loan amounts ranging from $10k to $5Mil, and some of the lowest rates available. Each type of small business loan is unique, and specializes in helping business owners with low FICO accomplish virtually any specific business goal.
  • Business Lines of Credit: Draw what you need from a line of credit. You can then replace the money you took out, which then becomes available once again to take out. This is what differentiates a business LOC from a regular business loan, and what makes it more flexible than any other kind of financing. Amounts offered can range anywhere from $10K to $2Mil, and fund typically within 24 hours after applying. Repayment terms are entirely up to the business owner, as you decide when and how much you want to take out. This ensures that you always only pay for what you need!
  • Equipment Financing: Lease, upgrade or purchase equipment within about 1-3 days after applying. Great for any business owner who needs fast funding to replace any equipment, from any industry. No collateral is needed in order to get an equipment loan – instead, the equipment itself is used as collateral. So no personal or business assets are put at risk!
  • Purchase Order Financing: Get what you need to fill your purchase order, in advance of slow customer payments. Great for business owners who can’t wait for a customer’s payment to get the funding they need in order to fill a new one’s!
  • Accounts Receivable Lines of Credit: Turn your I.O.U.s into cash! Get a line of credit by selling off your accounts receivables – without notifying your customers. This makes AR financing a popular choice among those looking to protect their reputation with their customers, while getting what they need to easily fill their orders.
  • Merchant Cash Advance: Get a lump sum of cash in advance of slow payments. This has become an incredibly popular choice among business owners with limited financials due to incredibly simple qualification requirements, and the flexibility of payment terms. Unlike a regular loan, the amount you have to pay fluctuates to match the sales of your business. That means the less your business is making, the less you have to pay!

These are just a few examples of high risk business financing options offered by NBC to businesses with poor credit that would otherwise be considered high risk business loans.

Why Choose NBC for High Risk Business Loans?

Because NBC knows that the same business financing options labeled as “high risk” by banks are often the types of loans that help businesses most!

Many of the businesses that National Business Capital works with have been denied by banks and traditional lenders that claim the financing options they seek are high risk business loans. 

These businesses now contribute to NBC’s 90% approval rating, due to their belief that a company is not defined by their credit score.

About the Author, David Surrusco
David Surrusco is the Head Content Writer at National Business Capital, is best known for his work in creating what has become the best business financing blog known to mankind: The NBC Advisor.