Credit & Qualification

Yes! Bad credit doesn't mean no options. Here's what's available:

Best Options for Bad Credit (Under 600):

1. Merchant Cash Advance

• ●No minimum credit score
• ●Based on card sales volume
• ●Same-day funding possible
• ●Higher cost but accessible

2. Invoice Financing

• ●Your credit doesn't matter
• ●Based on your customers' credit
• ●Great for B2B businesses
• ●Fast funding

3. Revenue-Based Financing

• ●Focuses on monthly revenue
• ●Payments flex with income
• ●No credit score minimum
• ●Good for consistent earners

4. Equipment Financing

• ●Equipment serves as collateral
• ●Collateral reduces credit importance
• ●May need larger down payment
• ●Still accessible with 550+ score

What These Lenders Look At Instead:

• ●Monthly bank deposits (revenue)
• ●Cash flow consistency
• ●Time in business
• ●Industry type
• ●Bank statement health

Improving Your Approval Odds:

1. ●Show strong, consistent revenue
2. ●Provide clean bank statements
3. ●Offer collateral if possible
4. ●Have clear use of funds
5. ●Be transparent about credit issues

Cost Reality: Bad credit = higher rates

• ●MCAs may have 1.35-1.50 factor vs 1.20-1.30
• ●Interest rates 5-15% higher than prime
• ●Smaller initial amounts
• ●Shorter terms

Building business credit takes 6-12 months of intentional effort. Here's how:

Step 1: Establish Your Business (Week 1)

• ●Form LLC or Corporation (not sole prop)
• ●Get EIN from IRS (free, immediate)
• ●Get dedicated business phone number
• ●Use business address (not PO Box)

Step 2: Open Business Banking (Week 2)

• ●Business checking account
• ●Keep personal and business completely separate
• ●Maintain positive balance
• ●Never overdraft

Step 3: Register with Credit Bureaus (Week 3)

• ●Dun & Bradstreet: Get DUNS number (free)
• ●Experian Business: Verify listing
• ●Equifax Business: Check your file

Step 4: Establish Trade Lines (Month 1-3) Apply with vendors that report to bureaus:

• ●Office supplies: Staples, Office Depot
• ●Shipping: UPS, FedEx
• ●Home improvement: Home Depot, Lowe's
• ●Technology: Dell, Apple

Start with net-30 terms. PAY EARLY, not just on time.

Step 5: Get Business Credit Cards (Month 2-4)

• ●Secured business card if needed
• ●Cards that report to business bureaus
• ●Keep utilization under 30%
• ●Pay in full monthly

Step 6: Monitor and Grow (Ongoing)

• ●Check reports quarterly
• ●Dispute errors immediately
• ●Continue paying early
• ●Gradually increase credit lines

Timeline Expectations:

• ●3 months: Initial trade lines reporting
• ●6 months: Paydex score established
• ●12 months: Strong business credit profile
• ●24 months: Access to business loans without personal guarantee

Credit requirements vary significantly by product:

No Minimum Credit Score:

• ●Merchant Cash Advance
• ●Invoice Financing
• ●Revenue-Based Financing
• ●Some Working Capital Loans

These focus on business revenue instead of credit.

500-580 (Poor Credit):

• ●Equipment financing with 30%+ down
• ●High-rate working capital
• ●Secured business loans
• ●Some MCAs with strong revenue

580-620 (Below Average):

• ●Most MCAs
• ●Equipment financing with 20% down
• ●Short-term working capital
• ●Some lines of credit

620-680 (Fair):

• ●Business lines of credit
• ●Standard equipment financing
• ●Term loans (alternative lenders)
• ●Most working capital products

680-720 (Good):

• ●SBA loans
• ●Bank term loans
• ●Best rates on equipment
• ●Unsecured lines of credit

720+ (Excellent):

• ●Best rates on everything
• ●Largest amounts
• ●Best terms
• ●Unsecured options

Remember: Credit score is just ONE factor. Lenders also consider:

• ●Monthly revenue
• ●Time in business
• ●Cash flow
• ●Industry
• ●Collateral
• ●Existing debt

A business with $100K/month revenue and 580 credit may get more than one with $20K/month and 720 credit.