A person starting a business with bad credit.

How To Start A Business With Bad Credit

For many people, starting their own business is the ultimate dream. Who wouldn’t want to be their own boss? Starting a business takes capital however, and if you have bad credit, that can be a problem. Still, where there is a will, there is a way. Take a look at three ways to start a business, even if you have bad credit.

Get An Online Loan

Wait, can you get a loan if you have bad credit?

Absolutely, but you will have to turn to a new loan source. Your local credit union is unlikely to offer you financing with a low credit score, but an online lender just might.

We can even help you get an offer for financing right now.

Here is how it works. You fill out one short loan form and your information is submitted to a network of online lenders. If approved, one of these lenders will make you an offer for the money that you need. If you like the offer, you can have the money you need to start your business as soon as the very next day.

The Good About Online Loans

The great thing about online loans is that you get access to lenders that you otherwise could not. There are more lenders online and many of them are used to working with those with bad credit. One of them may be able to get you a loan offer, even if you have been turned down in the past.

Even better is the fact that you could have your money quickly. If approved, it could be sitting in your bank account as soon as the next business day.

The Bad About Online Loans

Not everything is perfect with online loans however. If you have bad credit, your loan terms are likely to be considerably higher than what someone with good credit would receive.

If you decided to go with an online personal loan, be sure to thoroughly read all of the loan terms. Make sure that the terms are not too costly and that you can afford to make the payments. Remember, start ups are not always immediately successful, so plan accordingly.

Also, try to take out as little money as possible. Plan your expenses over the first few months of operation so that you can have a good estimate of how much you really need. If you only need 10,000 Dollars, why pay interest and fees on 20,000 dollars?

Start A Low Capital Business

There are many businesses that do not take much money to start. For less than $1,000, you can be well on your way to self employment.

When you are looking for a low capital start up business, think about service businesses and the skills that you have. Services like carpet cleaning, house cleaning, dog waste removal and painting are in high demand. All of these businesses can be opened with minimal capital and it is very likely that you already own the tools of one of these trades.

The Good About Low Capital Businesses

With a low capital start up, you avoid one thing that is a drag on many businesses, debt. Buy all of your equipment outright and you will not struggle with paying back debt while you try to grow your business.

Without debt, income you make can go right back into the business instead of making a lender rich.

The Bad About Low Capital Businesses

The negative with a low capital start up is, quite frankly, the lack of cash. You will have to do everything the hard way because all of the money you have will go to purchase your equipment. That means that you will have to network with friends and on social media for business. You will also need to choose cheap advertising venues like Craigslist to sell your services.

Starting a business with little capital is very much possible, but it will take work. If you have the drive to succeed, you can do it.

Save The Money You Need

You might not like to hear it, but saving the money that you need for a business might be the best option. It would allow you to have all of the money to start out on the right foot without sacrifices. Saving would also allow you to run your business without the burden of debt.

If you want to go this route, open an online savings account devoted strictly to your business. You do not want to co-mingle funds meant for other reasons. To fill this account, get a second job. Should you not have the time for a second job, find it. This will get you ready for the hard work and the long hours that you will have to put in as a small business owner.

The Good About Saving

Saving money is always a good thing, but with a start up business, there are many advantages. Chief among them will be the ability to operate without a monthly or bi weekly loan payment. You can use the money that you earn to pay yourself and to put back into the business.

As you save money for your business, you will also develop skills that can help you succeed. You will learn to be frugal and to be driven to succeed.

The Bad About Saving

On the bad side of things is simply the fact that you will have to wait to start your business. Perhaps the market is hot for your business concept at the moment or you are just impatient. Waiting is not something that most people like to do.

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James Car is a finance, loan and budget expert based in the United States. After attending Brookhaven college, he went on to become a successful entrepreneur. He now enjoys writing articles that help people save and make the most of their money.