Running a business is hard, especially in the current economic circumstances. A lot of businesses are failing because it has become more and more difficult to meet payroll and other expenses. Revenues aren’t matching what they were a short two years ago.

I have several businesses of my own and also have close friends who own their own companies. When we get together to talk, it often becomes a vent-fest because of the difficulties we all face. I’ve been lucky enough to stay in front of my debt, but I’ve helped friends who need loans just to stay in business.

Economic factors have contributed to their lack in sales and this has made it harder to pay the bills. That is going to affect credit scores and therefore the ability to get loans.

Credit Score Required To Get Business Loans

In order to walk into a bank to get a loan, you’re going to need to have a FICO score of at least 650. Since many banks are distressed right now you may see requirements that are more strict than that. Depending on the bank you talk to, you may not be able to qualify with anything under 700.

This means that if your FICO score is under 700 you have some shopping to do. If it’s under 650, you can pretty much forget about getting a loan from the bank and you’re going to need to look at other options. There are some other options out there but you’re going to need to be careful. Taking on additional debt has consequences and you’ll need to create a solid plan and stick to it.

Other Types of Business Loans For Bad Credit

A very common type of business loan that quite a few businesses use is the business cash advance loan. The lender will generally take a look at how much revenue you pull in each month and will offer a cash advance on that income.

Another variety of this type of loan is when the lender takes a look at how much you generally accept through credit cards each month and then make cash advances based on that income. This is pretty common and these lenders can generally be found online.

As a person who has dealt with a lot of people with bad credit, I’d like to offer some simple advice. Before you take out additional business loans for people with bad credit, PLEASE try to improve your credit. Your business is going to suffer from paying extra interest and that isn’t something that any of us wants to go through.

If you decide that you need to get a loan or go under, make sure that you make a solid plan. This will help you to get back on track. If you can’t make the numbers work on paper, they probably won’t work. If you can’t put together a plan that makes sense, you are probably in a lot of trouble.

Since I have dealt with a bunch of these cases, I would highly recommend proceding with caution. Try to get out of debt and improve your credit as soon as you possibly can.