Bad Credit Small Business Loans
There was a time when bad credit small business loans were not hard to find. This was back in the days before our most recent recession, when banks couldn’t resist the temptations of sub-prime lending. The returns were great, and with real estate appreciating in value as quickly as they could lend money, there was very little risk. With the pop of the real estate bubble, banks have faced the harsh reality that sub-prime lending is not as easy or as profitable as they thought it was. This is a story we are all too familiar with unfortunately.
What resulted was a severe lack of flow within the credit markets. Banks halted all lending activity for a period of time. The federal reserve dropped interest rates to 0% in an effort to get banks lending again, but the damage was too severe and they were too busy evaluating their losses to even think about how to make capital available again. This seems like it was a long time ago, and things have certainly turned around a bit, but one thing that hasn’t really come back are the bad credit small business loans. As a matter of fact, it’s not just the bad credit small business loans that have become difficult, it’s any type of business loan where the owner does not have excellent credit.
Alternatives to Bad Credit Small Business Loans
Many business funding sources have stepped in to help provide businesses funding to businesses with less than perfect credit. Whether it’s in the form of a merchant cash advance or an unsecured small business loan, working capital is now available for most businesses. Although there is still underwriting criteria to be met, applications are not being declined just because of a negative credit history. They look more closely at the health of the business altogether in order to make a decision.