Are you looking for small business startup loans? Starting and running a small business can be a challenging and risky endeavour. One of the main obstacles that many entrepreneurs face is obtaining the funding they need to get their businesses off the ground.
If you have a low credit score, limited business history, low annual revenue, or operate in a particularly unstable industry. You may be classified as a high-risk borrower by lenders and banks.
This can make it difficult to get approval for a small business loan, but it’s not impossible. In this blog, we’ll explore some of the options that are available for high-risk business loans. And provide some tips for increasing your chances of getting approval.
What are High-Risk Business Loans
First, let’s define what we mean by “high-risk business loans.” These are small business loans that are offered to startups or businesses with poor credit and are characterized by their high-interest rates.
Lenders consider these loans to be riskier because they are extending credit to applicants with imperfect qualifications. Such as a low credit score, low revenue, or no collateral.
While high-risk business loans can be more expensive than other types of loans, they may be the only option for some businesses. Particularly those that are just starting out or have experienced financial difficulties in the past.
Here are some options that you might consider:
- Merchant cash advance: A merchant cash advance is an advance on your future credit card sales. With this type of financing, a lender will provide you with a lump sum of cash in exchange for a percentage of your future sales. You repay the advance through daily or weekly debits from your business account. And the term of the advance can range from 3 to 24 months. While merchant cash advances can be a convenient option for businesses that need access to cash quickly. They can be expensive, with interest rates that can exceed 100%.
- Short-term loans: Short-term loans are another option for businesses that need cash quickly. These loans typically have terms of 18 months or less, and they may be secured or unsecured. Short-term loans may be a good fit for businesses that need to make a large purchase or invest in new equipment. But be for higher interest rates and shorter repayment periods.
- Equipment financing: If your business needs to purchase equipment, a vehicle, or any other type of machinery, equipment financing may be a good option. With this type of financing, you can finance up to 100% of the cost of the equipment, and you make regular payments over a set term, typically 3 to 7 years. Equipment financing can be secured or unsecured, and it may be available from banks, credit unions, and online lenders.
- Microloans: Microloans are small loans that are for businesses that are just starting out or have limited access to financing. The Small Business Administration (SBA) offers microloans through its network of participating lenders. These loans can range from $500 to $50,000. Microloans are for a variety of purposes, including working capital, inventory, and equipment.
- Alternative lenders: If you are unable to get approval for a loan from a traditional lender, such as a bank or credit union, you may want to consider an alternative lender. Alternative lenders, such as online lenders and peer-to-peer lenders, may have more lenient lending criteria and may be more willing to work with high-risk borrowers. However, it’s important to be aware that alternative lenders may also charge higher
A Quick Round Off!
There is no doubt that there are a lot of companies that offer high-risk small business startup loans. But, if you are unsure about the loan or don’t know the fundamentals of these loans, you require professionals. Therefore, you need to contact experts to guide you correctly. Thus, BitX Funding is a well-established financial company with experts who offer these loans.
You can talk to them about your problems, and we would love to solve them. Our financial experts will listen to your ideas, review your business, and suggest a suitable loan for your business. Moreover, we also ensure you can repay that loan quickly without disturbing your financial condition.
Call now to discuss your funding needs with a loan consultant at 203-763-1430!