If you are either a start up (pre revenue) firm or an established small or medium (we’ll define medium a bit later) sized company in Canada you should be investigating, and using the Government of Canada small business loan program.
Most places that offer Small Business loans Boca Raton for bad credit will often have high interest rates in order to make extra income for what you are paying off and this is exactly how they stay in business. They collect tons of money just off the interest alone. There are other organizations which require you to make a small initial deposit before giving you a loan. But this is most likely something you want to avoid because in the first place, you need money for a business loan so it does not make much sense when they require you to pay upfront money.
Both short and long-term loans for women area available. Loans for businesses that don’t involve real estate are on much shorter terms than mortgages. There is no rush to pay back loans in the beginning. Make sure you have enough cash flow after opening your business. Loans can also be made for new equipment and product purchases. If you are already open and in business it is often much easier to obtain additional funding and line of credits because your business is a tangible asset.
Be prepared for the bank to go over these with a fine tooth comb. If they are going to loan you money, they want to know the exact purpose for which it will be used. They will also go over your personal accounts. They want to make sure among other things that you will be able to repay the loan. No prior defaults on loans are another thing they will look to see if you have had in the past.
But there is something else that would be of interest to a bank. In a way, this is a form of Federal bailout going directly to small community banks. They have on their books loans that are in default and they could easily jump at the chance of being able to bail them out with this program. Especially if they had not been the recipients of the first TARP monies. Contrary to public sentiment, most of them did not receive any money. But again, this might not apply to that community bank. Since they typically package and sell their loans within three to six months, it probably wouldn’t even be in default at that point. It would be in the hands of the secondary market investor.
A great option for someone that has questionable credit is to deal with the SBA instead of a bank. These lenders are usually non-profit organizations and require a small fee to process your paperwork, but they will work with you if you have a good business idea. Getting turned down initially is not the worst thing in the world as they will tell you what you need to do in order to get the committee to pass the loan.
You have to realize that an incredible amount of new businesses never make it past the first year. Many start out dedicated and hyped-up about their new business, and they try as hard as they can to keep it up but they still fail. Passion alone won’t bring about success.
As you clear your bad credit small business loan, your credit score keep improving. With this, it will be easier for you to access loans in the future. It is essential that you compare various loan deals so that you get the one that works best for you.