Best Bad Credit Business Loans
September 14, 2023 | Tools & Tips
Getting bad credit business loans or a loan for a relatively new business can be difficult, but there are options. Assuming you’ve already registered your business and gotten an employer identification number (EIN), the next step is to apply for business credit with Dun & Bradstreet. Getting a D-U-N-S number is easy, and within eight business days you can start building your business credit.
Once your business credit is set up, be sure to secure funding from a provider that will report your payment performance to a major credit bureau. The better your payment performance, the more you’re able to build your business credit. Forward Financing is one of those providers that reports their customers’ payment performance, and they offer anywhere from $5,000 to $300,000 in revenue-based financing. Eligibility requirements are attainable too. With just 12+ months in business in the U.S., $10,000+ in monthly revenue, and a 500+ personal credit score, your business may be eligible for funding.
Revenue-based financing, also known as sales-based financing, is a type of funding for businesses that provides access to an upfront sum of working capital in exchange for a portion of the business’s future revenue. Your business will then remit payment to Forward Financing according to the payment schedule (typically daily or weekly), until a total amount, agreed upon and transparent upfront, has been paid in full. The total amount to be remitted is determined through underwriters based on the amount of funding provided and the business’s financial situation. This includes monthly revenue, expected growth, and time in business. The percentage of revenue remitted is usually fixed at the time of the agreement.
Because payments are a percentage of a business’s revenue, if the owner can show a decrease in their revenue, the amount the business is obligated to remit can be reduced as well. That means if a business’s revenue decreases, their payments can too. And if you don’t have any revenue for a sustained period of time, you can pause your payments until revenue picks back up. This is important because it means you aren’t stuck making payments if things slow down, and your business credit score isn’t negatively impacted.
Applying for revenue-based financing is easy and you’ll find out if you’re approved typically within 24 hours. Once you’re approved, your dedicated account executive will help you through every step of the funding process.