In all honesty, getting business loans for bad credit is much easier than getting other types of loans. However, since many people don’t know exactly how to go about getting these loans, I thought that I’d throw some business owners a bone. There are some fairly easy ways to go about it and this lesson will give you two of the easier ways.

1. Cash advances. There are hundreds of companies that offer business loan cash advances. Yes, they are somewhat expensive and getting a bank loan is a lot smarter. However, getting a bank loan requires solid credit and if you don’t have it, you’ll have to look at other options. It’s generally quite safe for a lender to offer a bad credit business loan because many businesses have money coming in each month. Most lenders that offer this type of service will only offer you a loan if you accept credit cards. If you do, it’s easy for them to connect to your merchant account and get their money back. This really lowers the risk for them so most of the time they don’t really care what your credit looks like. These aren’t the cheapest loans out there but can get you by if you really need to make payroll or pay for some other expense.

2. Hard money loans are also pretty easy to get, even if you have bad credit. Most bad credit business loans are structured as a hard money loan because the lenders don’t have any other way to hedge their risk. You lay down an asset like a building or car that you own and the lender provides you with a loan for a set amount of time. These loans usually span over a few months. The lender will usually charge you a set percent on the amount that you need to borrow. This is generally one or two points (percentage points) if the loan lasts for a few months.

Heavy Disclaimer: Bank loans are WAY better than both of these options. Banks will give you better rates and the repayment terms will be a lot better. You won’t have to pay the loan off within a couple months. I know that I almost always say this – shop around! I keep hearning horror story after horror story of people getting hosed by bad loans, because they were too lazy to do their shopping.

Getting a traditional bank loan when you have bad credit is generally difficult, and getting small business loans for people with bad credit is no exception. A bank is generally not going to be willing to work with you unless you have a credit score above 650 (sometimes 620).

If your credit score is under 650, you will probably have to look at other options because you aren’t a healthy risk for a bank. Banks aren’t in the habit of lending money to people who have struggled to pay their bills, especially if their business isn’t producing well. This means that you’ll either have to find a cosigner or look at other options.

Other Options

A very viable and unique option is the business cash advance loan. They aren’t the cheapest option out there in fact you can expect to pay a lot to be able to use this type of loan. However, if it’s your only option and you have enough cash flow coming to pay for it, it can be a lifesaver. I would definitely recommend thinking this type of loan through because the interest (they call it fees usually) can be quite extreme. Since getting bank-provided small business loans with bad credit is almost impossible, this might be your only option.

Getting this type of business loans is generally quite easy, as long as you accept credit cards. This takes most of the risk away from the lender, since they can tie into your credit card system to get their payments. This is a lot like a traditional payday loan or cash advance where they prefer that you get direct deposit from your job. That allows them to ensure that their payments will be available for quick withdrawal from your bank account.

Another option that you may not have considered is taking out a home equity loan. This is usually an easier loan to get than a business loan because it’s collaterized. That significantly lowers your risk with the bank and allows you to get a much lower interest rate. Using a cosigner for this option is also an option and can lower your interest further if the person who cosigns has solid credit.