30 May Securing a Business Loan with a Bankruptcy on Your Credit Profile
You might be wondering if you can apply for a business loan with a bankruptcy in your history. Bankruptcy is one of the major reasons small businesses get denied for loans. As a result, you might hesitate to apply for a small business loan. Though it may seem tough to get funding after a financial mishap, it’s still possible to secure small business loans after a bankruptcy. Just look to alternative lenders.
Ways to Improve Your Chances for Approval
When you’ve been through a bankruptcy in the past, you may have some trouble getting access to small business funding. Don’t let past financial mishaps get in the way of the future of your business. There are plenty of ways to increase your odds of getting approved for a small business loan with a bankruptcy on your file. Here are some steps you can take:
Improve Your Credit
After experiencing a tough financial challenge, you should first work to fix your credit score. Consider bad credit loans as a funding option to help you repair your credit. You can also make up late payments and pay down other debt to improve you score. Increasing your credit score will give you peace of mind and help with long-term financial goals.
Get a Cosigner
When your credit history is less than spotless, lenders might request a cosigner who will be liable for paying the loan back if you can’t. For example, if you face financial troubles or default, this individual will step forward to pay back the loan. If you want to improve your chances of getting a loan after bankruptcy, find a cosigner with a strong credit score to help you.
Put Money Down
Many large-scale lenders require a down payment from business owners who want a loan. It may seem strange that you’d have to put cash forward just to take money out. However, not all lenders require business owners to make a down payment. For instance, alternative lenders typically don’t ask you to put money down.
Have Steady Cash Flow
When you’re trying to get approved for small business loans, you may need to prove you have sufficient cash flow. Oftentimes lenders only make deals with businesses that have strong net incomes because it indicates an ability to repay the loan. This assures them that they’ll get their money back on time and in full.
Getting a Business Loan with a Bankruptcy from an Alternative Lender
Time is a major factor that decides whether you will be approved for a business loan after a bankruptcy. If the incident occurred recently, your chances of securing a loan are much lower than if it happened years ago. Nevertheless, alternative lenders can usually qualify an applicant if the bankruptcy occurred two to three years ago. It’s much easier to get a loan from these sources than it is to get one from a bank. Traditional lenders typically require a much longer bankruptcy window to have passed.
Rather than punishing you for your past, alternative lenders focus on current cash flow, which can be verified through bank statements. At QuickBridge, we will work hard to help you get a business loan despite a bankruptcy in your history. A quick application process and fast access to cash will help to grow your business and your credit score. Get in touch with us today to apply for a working capital loan.