Bank Loans For People With Bad Credit: Financing For Your Business (I)

People with an already established business who need money for an emerging company or a start-up business can get loans for people with bad credit easily by traditional banks. This is because banks are a lot more conservative with their investments and unlike many venture capitalists, they are far more likely to approve loans for people with bad credit. This is largely due to the fact that what they are investing is actually the money of their depositors.

However, government agencies such as the SBA (Small Business Administration), which work with many banks and small business owners, can get business loans for people with bad credit with a strong business plan and well prepared loan request. Banks are more likely to give modest loans, whereas venture capitalists generally look for much larger deals.

First, before approaching a bank for loans for people with bad credit, have all your key documents in order, starting with a solid business plan. You will also need to have the most recent financial statements available, projections for the business and a repayment plan and the collateral. Collateral may include hard goods, such as equipment, real estate, stocks or bonds, other personal assets, and personal guarantees. Banks also want to make sure that you are making your own investment in the business.

A bank is more likely to approve loans for people with bad credit if they see that the owners are investing a good percentage of the necessary start up capital into the business. To maximize your chances of receiving approval on business loans for people with bad credit from a bank, it would be wise to look at the situation from the viewpoint of the moneylender. A lender would definitely want to know the following details:

o Exactly how this business will operate and why it is anticipated that it will make money.
o Exactly how the money will be used.
o How do you plan to repay bank loans for people with bad credit and what will be the time frame for the same.
o Assurance that you are willing to take a significant financial risk in the business.
o Your willingness to be responsible and your ability to manage the business.
o The number of people going to be involved in management or operations and their responsibility for the proper use of the loan money.
(to be continued)