Financing is a life blood of any business. You have to be able to tap into external funding sources to grow your business. Unfortunately many businesses, particularly those with bad credit are not able to obtain conventional financing due to strict restrictions. Recent developments have enabled many of these type of businesses to obtain the badly needed money. Keep in mind that the interest rates will be high when you try to finance your business through this alternate routes. Shop around for the best rates possible. Here are 6 unconventional options you have available for business with bad credit.
1. Private Lenders
Getting financing from someone you know can be daunting. You will have to make a list of people you think that will be able to afford to lend you money. It is not an impossible process. The answer is closer than you think. You can use a former employer. They have the money and the means to lend you cash.Some of them give personal loans. They know who you are, so they are familiar with your character. They will find out if you are worth the risk based on your work history and attitude. They will have their attorney draw up an agreement for you to sign.
2. Use Factoring
Another option is to use Factoring companies. You can sell you invoices or accounts receivable to them. You will get paid faster. In some instances, you will get immediate a cash advance on your outstanding invoices. Once you sell them your accounts receivable, they will bill your customers to get the money that they have paid to you.In turn, they will charge you a fee for selling you the service. If you want to get access to more money, you can sell them all of your accounts receivable. The more invoices you sell them, the more money you will get to use for your cash flow needs.
