Can You Get a Capital Advance with Bad Credit? 

It’s no secret that people with low credit scores have a difficult time securing financial assistance. Low credit scores mean that traditional financial institutions are reluctant to extend a loan – or if they do, it’s at a very high rate. For this reason, an alternative form of financing like a merchant cash advance (MCA) may be a better option for business owners with bad credit. But it’s still a process! Here are some other meaningful steps you can take to help secure a capital advance if you have bad credit: 

Prepare your business for due diligence. Companies like Wellen will conduct rapid, but extensive due diligence before extending a capital advance. This involves reviewing items such as the applicant’s business bank statements, personal credit reports, and public records. You may also be asked to provide copies of applicable business licenses and legal documents, such as tax documents. If you have bad credit, you can improve your approval odds by identifying consistent revenue streams before you apply. 

Write a solid business plan. A well-thought-out business plan with a mission and detailed strategy will boost your odds of securing financing. Your business plan should include projected financial statements, in addition to the statements you provided above. If you have a strong management team, you can also highlight their background, experience, and credit worthiness. 

Lender reputation. Having bad credit means you won’t have as many lenders to choose from. However, it’s still important to evaluate a lender’s reputation before committing to an advance. To do so, read online reviews and check with other local business owners to see which lenders have the best reputation. For instance, as of this publication, Wellen Capital has a 4.5 star Google review rating! 

Improve your credit scores. At the end of the day, it’s always a good idea to improve your credit score. If possible, take the time to do so now, before applying for a capital advance. Start by reviewing your credit reports and disputing inaccuracies that are negatively impacting your score. Then, pay down debts to reduce your credit utilization and continue making on-time payments. If your business lacks a credit history, open a business credit account and start making regular payments. 

Regardless of a business owner’s personal credit, businesses under a year old (and those with limited demonstrable revenue) will still find it difficult to qualify for a business advance. Business owners still need to demonstrate strong, stable cash flow to qualify for an advance. So it’s important to take the time now to develop a strong business plan, secure reliable revenue streams, and improve your credit score. This will make it that much easier to get a business funding when the time comes. 

Ready for a business capital advance now? Apply here.