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Matching Business Owners with Loans by Credit and Financial History

BitX Funding Matches Small Business Owners with Loans That Fit Their Credit and Financial History

Loan Providers
In a Nutshell: BitX Funding partners with more than 100 lenders to make funding accessible to small business owners and startups. Borrowers can fill out one loan application and undergo a single credit inquiry to match them with the best lender and loan type. BitX Funding provides an alternative to the traditional bank process and an appealing option for entrepreneurs with credit issues or limited cash flow.

Many would-be entrepreneurs have recently decided to get out of the corporate world and open small businesses. But those individuals can find challenges when they try to secure funding.

That’s why BitX Funding works with various lenders to provide many loan options for small business owners.

“For startups and existing businesses, we can stack multiple loans together,” said Todd Rowe, President of BitX Funding. “Our team can get small business owners one, two, or three unsecured personal term loans for business purposes, and they can give it to the business in an equity contribution or a loan contribution. Once the funding is infused, the business can flourish.”

Since the COVID-19 pandemic, more people have shown interest in starting businesses. Some were laid off, while others realized they could take control of their careers.

“We use Google Analytics to see how much traffic is coming in for startup or FHA loans. That tells me there is huge demand from people wanting to start their own companies. We can catch that demand in an alternative way,” Rowe told us.

The BitX Funding loan process differs from traditional banks. If individuals turn to banks for unsecured loans, some may face problems, especially if they have been out of work and their credit scores have dropped. Alternatively, Rowe started BitX Funding specifically to loan money to companies that may not fit into the traditional mold.

“In 2014, I said to myself, ‘Wow, I see all these files come across my desk; why can’t we say yes to them?’ They don’t fit our model. I opened the marketplace and created a one-stop-shop, where I connect the right customer with the right lender and loan,” said Rowe.

Overcoming Credit Challenges to Secure Business Loans

It isn’t easy for individuals with fair or bad credit to secure business loans. Business owners need a FICO score of above 699 to have good credit, and any credit score between 300 and 699 is considered poor.

But individuals with lower FICO scores can still secure business loans.

One option for poor personal credit is a short-term business loan. For example, if a company wanted liquidity to cover equipment down payment for a new truck, it could tap its cash flow to cover the down payment, as its low FICO score would make it challenging to use other loan types.

Another option a business owner with bad credit can offer is collateral or assets for a secured equipment loan. Entrepreneurs whose personal credit is better than their business credit often find that lenders weigh personal credit more heavily than business credit. The point is, post-COVID-19 having good personal credit is key to getting an unsecured loan.

Would-be entrepreneurs with poor credit can face even more problems. Most lenders offer business funding based on how long the business has been operating. So startup owners with poor credit looking for equipment financing will have to put up a hefty down payment.

“The general rule in lending is the lender wants to know, ‘will you pay the loan back?’ Your credit score is your report card, and it lets the lender know your prior behaviors and if you will pay the loan back,” Rowe said.

Rowe can usually secure funding if a company is a startup with a 700> FICO score, has been in business for six months, and has at least $10,000 in deposits. Suppose a business receives money from BitX Funding, stays in business for at least a year, and secures $100,000 or more in annual revenue. In that case, it can expect its Paydex score to rise and business credit to improve significantly. When this happens, lenders will compete for their business.

Connecting Startups With Funding Opportunities
Startup owners who want to secure a loan from BitX Funding need at least a 700 FICO score or $50,000 in revenue. Rowe recommends that individuals with poor credit look into credit repayment programs.

One popular loan for startups with better credit is Amazon Loans for sellers.

“BitX Funding’s inventory finance process evaluates your seller type. Unlike banks that look to see if you have a qualified brick-and-mortar store, BitX Funding opens the gates for 3P sellers and allows for more money faster. When you put in the application, you’ll receive a value based on your equipment/inventory in around 3 to 4 weeks. As long as you have a product to sell, the option is yours for the taking,” writes NewsDirect.

BitX Funding helps startups secure loans based on a holistic business picture, not just credit.
Additionally, if startups have $100,000 to $1 million in inventory, BitX Funding can offer them SBA, short-term, or mid-term loans. If they have more than $1 million in inventory, Rowe and his team can get them a line of credit or an asset-based loan.

Many small business owners appreciate BitX Funding’s alternative opportunities.

“When I had nowhere else to turn, you were there to help me get my first business loan. Thank you so much for your help. I’m on my way to starting my first business,” one client wrote in an online testimonial.

“Todd and his team were very helpful. As a new business with no credit history, they were able to get us approved when no one else could,” another wrote.

BitX Helps SMBs Scale Their Operations

Since BitX Funding launched in 2014, the company has doubled in growth year over year. Customers find it appealing because they don’t have to waste time filling out multiple loan applications. Instead, they can navigate to a central hub, fill out one form, and have only a single credit inquiry.

“We’re going to listen to your needs, wants, and goals and connect you with the right lender and loan,” he said.

Rowe also said that small businesses seeking loans can now receive favorable terms.

“We’re seeing interest rates around 12% for five- to seven-year terms with no prepayment penalty,” he said.

Lenders want to work with BitX Funding because Rowe understands their underwriting guidelines. He’s not going to send them applicants who have no chance of approval. That’s why the company partners with 100 different lenders, each with specific criteria.

Rowe also advises entrepreneurs preparing to apply for business loans in the future.

“Credit’s a funny thing. When you don’t need it, it’s not on your mind,” Rowe said. “When you need it, you must ensure your credit score is great. The rule of thumb when it comes to your credit is you want to have your debt-to-income ratio below 40, your credit utilization below 30%, you don’t want to have more than four recent inquiries in the last six months, and you want to pay your debts on time.”

BitX Funding has already helped many small businesses secure the loans they need to get off the ground or grow and aims to expand its offerings to help even more.

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