It may not be as difficult as you think. Although banks aren’t lending as much to businesses as they used to, there are a number of direct lenders with access to this capital and a number of programs to meet the needs of small to mid-size businesses in most industries. Believe it or not programs exist for nearly all credit types, income levels and time in business. An experienced lending broker will find the right solution to meet your needs based on how much capital you need and how long you will need it for.
Generally speaking the minimum time in business for any lender to consider working with you is 6 months in business, but most lenders want to see at least 1 year in business before moving forward with any working capital loan options. It’s preferable to provide the last 6 months of business bank statements to determine monthly and yearly revenues, but most lenders will tend to the last 3 months more weight if the trend shows consistent business growth.
Although it is possible to get approved for a loan with less yearly revenue (if you have 3 solid months of revenue), most lenders want to see a minimum of $100,000 per year and some programs naturally have bigger requirements. Even if you are approved at $100,000 revenue I would not expect an approval higher than $12,000 as most working capital loans will fall between 8 and 12% of yearly revenue.
It’s not ideal to have a 500 credit score and nobody will guarantee getting funding for your business with a score that low but this is a general rule of thumb because if the financials of the business look good enough a lender might find it worth the risk. Though it is possible to get an obviously interest rates will be much higher than someone with top tier credit. The best rates and programs are reserved for businesses with strong financials and principals with 700+ credit scores.
In order to get approved for a business loan lenders will take into consideration your time in business, yearly revenue and your personal credit score (loans require a personal guarantee). Based on these factors, along with what the funds will be used for, a financial broker will provide a few options to choose from (daily, weekly and monthly options available).
One thing is for sure, it doesn’t hurt to apply. If you would like to find out what can get approved please click the apply now tab and submit an application along with 6 months bank statements. It typically takes about 24-48 hours to find out what you can be approved for and there’s really nothing to lose. Even if you do not get approved an funding manager can consult with you and get you on the right path to get approved down the road, and this advise is free.
