Financing Options for Business Owners: What You Can Get Whether You Have Good or Bad Credit

by | Nov 8, 2019 | Finance, Small Business Loans

You can see business loans as a helping hand for entrepreneurs who want to realise their dreams in business. In the finance industry, business owners are known to have used loans for all sorts of things – from taking on new clients, opening new premises, and sustaining daily operations. Business loans can also save small business owners when the tax man is knocking or if there are debts to be paid. Whatever the reason you have for taking on a loan, the additional financing will sustain and boost the growth of your business.

We take you on a quick run-through of the financing options available for small business owners. If you don’t qualify for traditional loans, there are still other options available for you.

looking for finance options

Financing Solutions for Businesses

SBA Loans

SBA Loans are for established and profitable small businesses who are looking for bigger loans that they would not usually qualify for. It is an initiative by the Small Business Administration to empower small businesses in marginalised areas.

Traditional Bank Term Loans

Bank term loans require you to provide a collateral. You’ll have to make regular monthly payments until the loan plus interest is fully paid. The good thing about term loans is that the interest rates are usually lower than other types of loans. 

Business Line of Credit

A business line of credit allows you to borrow an agreed amount and only pay for the interest on what you use. It’s a revolving line of credit that will reset when you’ve paid off the initial loan amount. 

Business Equity Loan

You’ll have to provide collateral for this type of loan, which is in the form of residential or commercial property. You can borrow up to 100% of the value of a residential property used as security for the loan.

Equipment Financing

You can use asset-based loans where instead of paying for the full cost of the equipment upfront, you can pay for it in installments. Lenders will focus more on how much the equipment will cost instead of your credit score. 

Business Credit Cards

Business credit cards are a popular form of small business finance, but the interest rates are usually high. They do offer an interest-free period on charges.

man paying thru business credit card


What are the Financing Options for Bad Credit?

If you have poor credit, a merchant cash advance can be a good option to look into. A lender will give you a lump sum of money, which you pay back through a fixed percentage of your daily credit and debit card sales. 

If you haven’t established any financial statements and proof of income for the past two years, a low-doc loan could be an option. Low-doc and no-doc options are backed by residential property. The downside to this kind of loan is that they have higher interest rates.

Another type of loan you can tap into is unsecured loans. You won’t have to provide collateral or go through a complicated application process. The lender will analyse your finances, which includes bank transactions and other information, to determine how much will be loaned to you. 

What’s Next?

If you need to get an overview of all financial products available for business owners, check out Bizzloans UK which matches you with the most suitable lender and business loan. Start with a free quote below.

No Security Necessary

The main thing that makes unsecured loans more attractive than secured loans is the fact that they’re no security. It might be an obvious thing to highlight but it clearly matters. You won’t be weighed down by the pressure and worry associated with having collateral hanging over you and potentially being lost to the lender if you fail to make repayments. If you don’t want to take the risk of losing your collateral, you just need to opt for an unsecured loan instead. It’ll allow you to avoid any risks associated with secured loans.

Build Up Your Future Credit Score

By taking out a loan and then paying it off on time, you will help to build or repair your credit score. Many companies are dealing with poor credit, but by taking out an unsecured loan with a lender that is happy to lend to companies with poor credit, you can start to turn the situation around. Meeting regular repayment deadlines shows the world that you are able to stay on top of your financial obligations and pay off the money you owe, and that will only help your business going forward.

Why Your Business Might Want to Take Out an Unsecured Loan

There are lots of reasons why your business might take out a loan, as well as reasons not to. You shouldn’t take out a loan to cover running costs, but if you want to do other things, such as the things we’re going to discuss below, an unsecured business loan can be ideal.

Grow and Expand

Most entrepreneurs have big plans for their businesses. They want to ensure that their business is one that’s got a bright future. So if the time has come for you to grow and expand your business, you should think about whether taking out an unsecured business loan might help you to do that. It could be exactly what you need to get your business moving in the right kind of direction. It takes money and investment to grow your business and a loan might just be the ideal solution.

Take on More Clients and Customers

If your business doesn’t currently have the resources to deal with more customers and clients, it could be time to scale things up. However, that’s something that costs money, whether you like or not. Taking out an unsecured business loan could help improve the resources your business has available. It could mean hiring more people so that you have the human resources needed to take on more clients and make more customers happy. The loan will cover the costs associated with doing that and it’ll pay for itself if you’re able to improve your profits as a result.

Fund a New Marketing Campaign

Maybe it’s the case that attracting new customers to your business is where your problems lie. It’s not always easy to get your voice heard and make people aware of why they should be taking notice of your business. An unsecured loan could be used to fund a new marketing campaign that gets your message out there and makes more people interested in your business and what it’s offering. So if you have an idea for a marketing campaign that you think might work but you don’t have the financing for it, consider a loan.


Improve with Fewer Risks

The chance to improve your business in the many ways mentioned above offers you a real opportunity that you might want to grasp. Secured loans can offer the same access to financing but come with more risks to your business. With an unsecured loan, you can reap all the rewards that come with having the cash to invest in your business without having to worry about the risks adversely affecting the business in the future. The chance to improve with fewer risks attached to that chance should not be ignored or dismissed.

The Requirements for Getting an Unsecured Business Loan

unsecured business loan

There are some requirements you’ll need to be aware of before you take out an unsecured business loan. These aren’t too harsh or restrictive at all, but they are important.

24 Month Limit

When you take out an unsecured loan from Bizzloans, you have to pay the loan back within 24 months. That’s the maximum repayment term that’s on offer. Of course, that won’t be a problem for the vast majority of businesses out there. It’s important that you look at the finances closely and decide for sure that this is something your business is going to be able to do. You’ll have a chance to do this when you get a quote from us, so you’ll know exactly what you’re signing up to.

Business Bank Statements

To ensure your business is in a financial position to take on a loan of the size you’ve applied for, you’ll need to simply submit your business’s bank statements. This allows us to ensure that we lend responsibly and don’t burden you with a debt that is too much for you to take on. It’s in both your best interests and ours that you’re able to handle the loan that you take on.

Photo ID

To ensure everything is correct and proper, and you are who you say you are, you have to submit a photo ID. This is common practice and ensures that all financial transactions are above board and in order. It’s very easy to do and needn’t be a headache for you. Once we are satisfied with your application, you’ve provided the bank statements and we’ve checked your ID, it won’t be long before you have access to the loan you applied for.

Getting an unsecured business loan for your company could be just what it needs right now. It’s a much safer option than taking out a secured loan and you’ll be accepted much faster. Don’t hesitate to get in touch with us here at Bizzloans if you’re thinking of taking out an unsecured business loan.


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