A Bad Credit Score Doesn't Have to Block Your New Business
Use readily available resources to rework budget issues and grow your company.
Entrepreneurs start their journey with nothing but an idea, a dream and willpower. But without finance? All of that can only take you on a frustrating trip around this simple truth: “Money answereth everything".
Herein lies funding options to consider if you are in that very bad-credit position.
Related: Funding Options for Bad Credit Risks
Work both family AND friends
It hurts to know that the age-long epicenter of capitalism, (i.e., "banks") won’t bat a lid to your request for funding. However, knowing that nobody roots for your success like those closest to you can be a huge asset.
Review your relationships and reach out to the people you’re tightest with. You'll be amazed at how much you can raise in the process. You just might find yourself a more experienced and better-human-being of a co-founder. (With a built-in network.)
Grants grant dreams
Invented in the nineteenth century, industry grants now provide up to $500,000 worth of help to fund small businesses. Simply search the Grant.gov website for a suitable one that applies to your situation. Every buck matters when banks aren't on your side.
Be mindful of micro-lenders
There are some instant approval credit providers that could offer you money to spend without checking your credit history. Unfortunately, they come with very high interest rates. Got a super poor credit score? Think twice about this option. Nevertheless, it remains one when most other avenues have been exhausted.
Resuscitate your worthiness
Make it a priority to review your credit reports and find out the area of your finances that needs stern attention. Discover that one aspect that, when positively improved, could have the greatest positive impact on your score. Then focus your efforts on that aspect of your financial life. John Ulzheimer, a former FICO and Equifax staff, calls this the “triage process.”
Cut down on fees
In 2020, cards charged up to 3.5% of every transaction in fees. Considering the volume of your annual transactions, you could save a fortune by utilizing options that charge little or nothing.
For frequent petty expenses, you can consider utilizing CashApp’s fee-less transaction benefits. Take some time to do your research and consult professionals for advice.
Entrepreneur Leadership Network Contributor