How To Get A Business Loan With Bad Credit

Credit rating is the primary consideration by financial institutions for getting a traditional business loan

. The first thing a person who wants to obtain one, should do is to get a credit report to have an idea if getting a business loan could become a problem. This is available online and it is normally for free. If possible, the credit rating should be reviewed and negative listings that are discovered should be improved prior to application for any business loans as a declined loan will have a waiting period of at least 60 days before another application can be accepted. In case a bad credit rating is given, the next thing that can be done is to attempt improving the rating. This can be done in two ways.

Reflection

Dispute the credit file In the Fair Credit Reporting Act, any item placed in a persons file with the credit bureau must be first consulted with that person personally and any conversation recorded as proof. Without the proof, any item placed in the file can be disputed as incorrect and should be deleted. It is not an issue whether the information placed in the file is correct or not, as long as it was not consulted beforehand, by law it is inadmissible. A copy of the credit file can be obtained for free by fax or online from any of the three credit bureaus if credit had been denied within the last two months: TransUnion, Equifax and Experian. A dispute letter via registered mail must then be sent to the credit bureau where an incorrect item or items was found and removal of the item or items requested. A response should be forthcoming within 30 days.

Logic

Get a loan to pay off outstanding debt When a long-term business loan or credit line is what is needed, one way to improve the chances it will be obtained is by paying off outstanding debts with a short-term financial instrument. This will improve the credit rating significantly. Pre-approved loans are typically offered when a bank account is open in some financial institutions as part of the financial package and may take the form of an overdraw agreement or credit cards. This is an emergency measure that should only be used when repayment can be reasonably expected within a short period of time, such as a pending business loan. Other financial instruments to consider are payday loans and cash advance loans . These types of loan do not require credit verification and may be obtained after a minimal waiting period, as little as one hour in some instances. It is important, however, to use these alternatives only with the intention of paying them back in due time, because defaulting on these instruments would have deleterious effects on credit ratings.

Loan options

If these two measures fail to improve credit rating to an acceptable degree, a loan may still be forthcoming if the loan is secured with collateral together with a co-signer with good credit rating. If all else fails, one may consider sub-prime lending institutions, which typically charge higher rates but will be more accommodating of bad credit.

Turing Point

For more information on Bad Credit Business Loans please contact Merchant Advisors at 800-870-7622 or visit us online at http://www.OnlineCheck.com.

by: Lindae Williams

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