If you really require a business loan, but your credit rating is killing your dreams, then do not worry. You can always head to companies that provide funding for small business with bad credit. If you want a small loan, then merchant cash advance is a good option and you can find this loan online. But there are some loans, which you shouldn’t take when you have bad credit and are in some financial problems…
Auto title loans: You’re clean and for some people, brand new car is on stake with auto title loans. If you cannot repay this loan back, then you lose your car. Besides that, even if you do take an auto title loan and your car isn’t matching up to the expected value, you will end up getting less cash than what you wanted and plus your vehicle is at risk. This loan could be a stressful thing for you so it is better to avoid auto title loans.
Payday loans: Payday loans for a business venture or little office things isn’t really an option, but if you do take it, then you will pay high interest rates and in case you repay late or miss out, then you will end up giving the lenders more than the estimated rates. A lot of lenders have hidden rates and fees, so be careful when you select a lender for this loan online. Rather than payday loans, you could take merchant cash advance and get a decent amount of money which will help you in your business.
Home loans: Well, if you cannot get a loan due to your bad credit, you don’t have to put your house in trouble. This loan is risky and tedious. If you delay or cannot pay off any amount of the interest rates or mid-way through the repayments, you face a major debt in your business and have to stop the repayments, then you could lose your house. There are ways of settling payments and freezing all the loan repayments for a while, but there is always this tension of your house being taken away. So try avoiding this loan.
Overdraft loans: You must have come across this term while you were at your bank asking for loan details. An overdraft loan is basically when you opt in to overdraft protection. This program lets you write a check or withdraw funds from ATM’s even if you have no funds in your account. But, the bank charges a fee of about $35 for each and every transaction on your account until your balance is $0. Basically in the end, you end up paying higher rates for the overdraft loan than what you took out.
Be smart and think wisely when you go about to take loans for your business venture. Your bad credit will result in the lenders win-win sometimes. So, always be careful about the loan you opt for. Try saving up and improving your credit to get a decent and secured loan. Otherwise, like we said, opt for merchant cash advance.