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Having bad credit can be a tough obstacle to overcome when looking for funding options. Whether you are in need of a loan for business or personal use, it can be hard to find a lender who is willing to work with someone with bad credit. Fortunately, there are still ways that you can find the funds you need, even if your credit score is less than stellar. In this blog post, we’re going to explore the different ways you can obtain funding when you have bad credit.
Getting Access to Cash When You Need it
Finding the funds needed to cover unexpected costs or fund special projects doesn't have to be a stressful experience. Taking the time to explore all of the options available can help you decide which one is best for your unique situation. While we are going to explore more traditional options like loans and borrowing from people you know, don’t forget about cash advance apps or even secured lending options too. It’s important to take a look at this list and see what feels like the best fit for you. Let’s take a look.
1. Small Business Administration Loans
The Small Business Administration (SBA) offers loans to businesses and entrepreneurs. These loans are designed to help those with limited access to capital due to their credit history or lack of collateral. The SBA also provides assistance with loan applications and business planning through its network of Small Business Development Centers.
2. Credit Unions
Credit unions are another option if you have bad credit and are in need of funds. Credit unions tend to be more lenient than traditional banks when it comes to extending loans, making them an ideal option for those with poor credit scores. Additionally, many credit unions offer lower rates on their loans compared to those offered by banks and other lenders, saving you money in the long run.
3. Online Peer-to-Peer Lending Platforms
Online peer-to-peer lending platforms allow individuals and businesses to borrow money from other individuals or organizations without going through a bank or financial institution. The terms and conditions vary from platform to platform, but borrowers typically pay lower interest rates than they would on typical bank loans. It’s worth noting that some online peer-to-peer lending platforms may require borrowers with bad credit scores to provide collateral in order to secure the loan.
4. Microloans
Microloans are small loans made by nonprofit organizations and community development financial institutions (CDFIs). They have flexible repayment terms that make them ideal for those who have difficulty obtaining traditional financing due to their poor credit score or lack of collateral. Additionally, many microlenders will work with borrowers who do not have perfect credit scores as long as they can demonstrate an ability to repay the loan in full over time.
5. Family & Friends Loans
And finally, asking family members or close friends may be one of the most overlooked sources of financing when it comes to financing options with bad credit scores. Before taking this route however, it’s important that both parties agree on concrete terms regarding repayment schedules and interest rates so as not to disrupt relationships if money becomes an issue down the line.