As a startup you know that you need money to fund your new venture. No matter how big or how small your startup is set to be, you will need money for such things as day to day operations and supplies needed to manufacture the product lines you carry or to carry out administrative tasks. Overhead is a huge concern in the beginning with more money going out than coming in so where does that leave an entrepreneur with little to no cash reserves and poor credit on top of that?
Funding Sites Not the Answer
With the rapid onset of crowdfunding sites online, increasing numbers of entrepreneurs seek investors to put in small amounts that will accumulate so they can run their business. Unfortunately, there are so many millions of people around the world seeking funds for anything and everything from mum’s funeral arrangements to business financing for a new company with an innovative product line. Because of the sheer numbers of people seeking funds, it is doubtful that crowdfunding will work for small business startups.
Personal Loans May Not Be Available
Having poor credit, or lacking sufficient credit history to get a good score, many new ventures are unable to get personal loans to use towards getting their company off the ground. Banks are flat-out refusing personal loans to anyone without a good credit. If you are in need of funds and cannot find financing in the conventional ways, you may have options at your disposal.
Secondary Lenders to the Rescue
One of the qualities that makes you an entrepreneur is your ability to step out into the unknown to form your own company. You have a grand vision for the future but are not afraid to fail on your initial efforts to grow your company. This is where secondary lenders come into play. These lenders do not rely solely on your personal credit history and will offer you either a short term loan with bad credit whilst some even offer long term personal loans based on what it is you are trying to accomplish. The point here is that not all lenders follow the same set of rules.
Do You Have Something to Secure the Loan?
You can most often get a personal loan up to £500,000 as a homeowner or someone with some sort of collateral from lenders such as themoneyhub.co.uk. You may not need great credit for a larger loan if you have something with which to secure the amount you need to borrow. Interest rates may be a bit higher than average but will the money keep your startup going so that you can earn a decent wage and pay back the loan timely? If so, this is the type of loan that you may be able to get without a good financial history.
So in the end, your financial history is quite likely to affect your new business because that is where you will be getting the funding for your startup. If you have less than perfect credit, loans are available to you. It’s knowing where to get them and then it’s a matter of borrowing only what you need. As an entrepreneur you take risks and this is one that can get your new company off the ground.
