Can Someone With Bad Personal Credit Get A Business Loan?
In the past, having bad personal credit would be a huge hindrance and an obstacle in getting a business loan. Your personal credit will be evaluated on your business loan application, and typically only banks will look at your business credit score.
Be aware that seeking a business loan with less than great personal credit will require you to be realistic about which loans you’re capable of getting, and should encourage you to open your eyes to more creative alternatives and online lenders. If your personal credit is poor, you’ll have a difficult time getting a business loan from a bank. Banks, more often than not, prefer those who have a personal credit score of 700 or greater in order to consider them for a business loan. This isn’t a fast and hard rule, but it is common to see.
One of the first steps that you probably already have done is to make sure you know what your current personal credit score is, then take a hard look at ways your score is being dragged down. Are you missing a credit card payment here and there? Are you only paying the monthly minimum? If you’re considering applying for a business loan, start making smart credit decisions months — preferably years — before you apply for your loan to give yourself time to get your credit score in a better place.
Of course, sometimes you need a business loan quickly, and in that case, you should consider online vendors, who are easier for those with poor credit to qualify for, and who work more quickly than banks. When applying for a business loan with poor personal credit, it’s definitely possible with hard work and patience.