Going into business, you have opened a corporate account with a bank. Thus you have a business credit card for your company. And while running your organization you so to say score the points. Many factors are involved in determining your credit score: payment history (35%), debt burden (30%), the length of credit history (15%), new credit (10%) and credit mix (10%). You may be asking why you need this score and here comes the answer: to represent your creditworthiness to a lender obtaining a loan.
FICO, a software company, introduced the FICO credit scoring model that is based on customer credit files of the three American credit bureaus: Experian, Equifax, and TransUnion in 1989. That model was accepted by the vast majority of banks and lenders and is still being used nationwide. FICO scores vary between 300-850. The scores above 650 are indicated as an excellent credit history, in the same way, scores below 620 mean poor credit reputation.
Whence a borrower with bad credit score often finds difficulties in obtaining a loan at favorable rates. A lender takes a borrower’s FICO into account, but nevertheless, that is not determining factor while making a decision whether to give money loan debtor or not. 800fund.com is one of these lenders that still pay more attention to other factors rather to FICO score.
Bad credit loans
According to the Federal Credit Union, the approval rate of business loans from big banks was just 23.3% in June 2016. But alternative lenders provide different available solutions and 99 out of 100 applications are approved weekly. You may be surprised, but that is a grim reality. For one reason or another, not everyone is accepted, unfortunately. But if you are in real need of cash, be sure you are going to be one of 99 approved borrowers.
Alternative lenders require just minimum credit score that shows that you operate your business at least half of the year and you are not one of those scammers trying to obtain as much as possible and disappear with borrowed money. Alternative financing for small business is a pricey choice but for the bad credit borrower who needs short-term working capital up to $1,000,000 is a great choice.
Merchant Cash Advance differentiate from other lending options, and it can be called not only a bad credit loan but also no collateral loan as the requirements for its obtaining are pretty small. First off filling out an application form takes minutes as it is available online directly on Website of Cash Advance Company and it has several easy questions. Moreover, the whole process of applying, approving and getting funds last maximum 72 and minimum 24 hours. 800fund.com does merchant cash advance, meaning they advance money to merchants by purchasing their future receivables. The factor can be from 1.23 to 1.56 and terms are from few days to 10 months.
How can I improve my business credit score?
Now you know that no matter good or bad score you have, you still can obtain a small business loan. Nevertheless, try keeping it positive. Pay your business bills on time or even before due time, have different credit accounts, e.g. business credit cards, trade lines, loans, and keep your credit use around 25%.