Boss Lady

How to start a business with bad credit


Got a great idea for a business? Starting your own company is an incredibly rewarding venture especially once it begins to grow and turn profit. Of course, you need much more than a great business idea to launch a startup and one of the main areas of consideration is funding. This can be problematic if you have a bad credit score as you may struggle to secure the funding that you need to launch, but there are solutions available if your credit rating is low.

Improve your rating

The most obvious solution is to improve your credit rating. This is a good idea no matter what but particularly if you want to start a new business. It can take some time but it is possible to improve your credit rating through a few simple steps. These include eliminating debt, checking your report for errors, paying bills on time, building credit by borrowing little and often and closing unused accounts and/or financial ties to those with a bad credit rating.

Alternative funding

Improving your credit score is a smart idea, but it can take time for results to show which is frustrating if you want to get your business up and running. In this case, you could look to secure funding from alternative sources. This could include crowdfunding, angel investors, friends and family and capital investors. The key to success with this path is creating a detailed business plan so that you can demonstrate to potential investors how their money will be used, when they can expect to see returns and why your credit score does not matter.

Bad credit bank account

Another good option for those with a low credit rating is to open up a bank account for those with bad credit with a company like Think Money. These banks allow you to open an account regardless of your rating and these accounts can make it easier to manage your money, help you to rebuild your credit score and also allow you access to credit which could be put towards your business venture.

Securing finance

No matter what approach you take to funding a small business, it is important that you do your research, write a detailed business plan and figure out exactly how much funding you need – it is also helpful to find ways to reduce costs to lessen the amount that you need to borrow.

It can be incredibly frustrating if you have a great idea for a business but you are unable to get approved for a loan because of your credit rating. Fortunately, this is not the end of the road and there are a few options available to you which should help you to secure the finance that you need to get the business up and running to the required standard.

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