How to Get Business Funding Without Good Credit

March 22nd 2020 at 2:31pm Published by sharpshooteradmin

This story may sound familiar. You need funding to pay a cost that could affect the future of your business. You go to one of the big banks and fill out a somewhat complicated application. You don’t have great credit, but you roll the dice anyway. A few months later, your application is finally processed, and the answer is a resounding no.

If your small to medium-sized business has had such an experience, then it’s not alone. Even though most businesses in Canada are small to medium-sized, generate tax revenue, and employ the majority of the private workforce, many are rejected for funding from conventional funders because they don’t satisfy their terms and conditions.

With big banks, it’s often a Catch-22 situation. Your small business was rejected for funding because it didn’t have the cash flow, business history, or credit to satisfy their requirements. And your small business doesn’t have the cash flow, business history, or credit to satisfy a conventional funder’s requirements because it doesn’t have the capital to invest in its growth or cover a temporary financial shortfall.

As the experienced alternative funding specialists that small to medium-sized businesses across Canada trust with their funding needs, we understand this situation. That’s why we don’t use traditional metrics to approve applications. Instead, we use cutting-edge data science and state-of-the-art technology to analyze your business’s overall health and approve a funding package that suits your needs. 75% of our applicants are approved for funding and receive funds within 24 – 72 hours of approval.

Please check out these frequently asked questions about business funding in Canada by SharpShooter Funding to learn more about how we things differently for small businesses in places such as Toronto, Oakville, Mississauga, Brampton, North York, Aurora, Guelph, Kitchener, Burlington, Markham, Oshawa, Vaughan, Barrie, Newmarket, Vancouver, Victoria BC, Winnipeg, St, Johns, Nova Scotia, Newfoundland and other parts of the country.

If your business doesn’t satisfy traditional metrics for approval, then here are some options for you.

Merchant Cash Advance

A merchant cash advance is an excellent option for businesses that don’t have the credit or collateral to be approved for funding from a traditional funder but have consistent cash flow. This is ideal if your business has a weak credit profile but frequent credit card transactions. A merchant cash advance can help you purchase equipment or inventory for big orders or if you’re interested in expanding your business without putting your credit on the line.

A merchant cash advance from SharpShooter Funding can turn your cash flow into capital by acting as an unsecured fixed price funding based on your projected sales. It also offers flexibility. Unlike a bank term funding on a strict repayment schedule, a merchant cash advance from SharpShooter Funding can be paid whenever possible. For example, you can pay more when sales are good and less when business is slow.

While your business doesn’t need to offer any type of credit or pay any fees to apply for a merchant cash advance, you must be in business for 60 days and offer us some details of your company such as total monthly sales, monthly credit card sales, peak sales months etc. The approval rate for a merchant cash advance with us is higher than 90%. Applications can be approved in less than three hours.  

When applying for a merchant cash advance, only partner with a reputable and reliable company like ours that offers complete transparency. Because merchant cash advances are unregulated, predatory funders can hide astronomical interest rates and added fees in the fine print and trap small businesses in debt cycles.

Bridge Funding

Another good funding option for businesses without good credit is bridge funding. This is a fast, low risk, and flexible option. It’s easier to attain because it’s a small short-term funding. Moreover, bridge funding can help your business build or repair its credit. As you repay off this small funding, your credit rating will gradually improve, until it reaches a point where you can apply for more substantial funding. 

Bridge funding amounts are typically a small short-term solution to help your business bridge the gap between other payments. With bridge funding you can do the following:

• Have enough working capital to meet immediate operational expenses
• Pay off some pending liabilities
• Pay for upkeep, maintenance, and repairs that are holding your business back
• Buy equipment that needs to be replaced
• Buy inventory to take advantage of opportunities for your seasonal business
• Invest in an opportunity that will result improve your cash flow

Working Capital Funding

This is an excellent alternative for a healthy business with steady revenue but less than ideal credit. The maximum funding amount is $300,00 with a term length of 6 to 24 months with a recurring weekly or daily payment structure. To qualify your business must have existed for at least three months and $15,000 in average monthly deposits. The credit score should be at least 500.

Working Capital Funding can help your business meet its short-term needs such as payroll, debt, rent, and other operational costs.

Long Term Funding

If you’re interested in growing your business with the help of SharpShooter Funding, then you can leverage your personal credit to get long term business funding. You’ll need a personal credit score of at least 620 and $120,000 in annual revenue. Your business must be operational for at least 12 months to qualify.

Long term funding has payment terms up to ten years and can be used to purchase inventory on a large scale, buy expensive equipment, hire new staff, bid for lucrative new contracts and invest in marketing to attract more business.

Bad Credit Funding

If you have bad credit, you can still get funding by exploring different options or playing up your strengths. By leveraging your personal credit, assets, collateral, a guarantor, cash payment, you can improve your chances of being approved. Alternatively, consider applying for less funding. As you make payments, you’ll improve your credit and qualify for longer-term funding options in the future.

It’s easy to despair if you need funding to ensure your business’s survival or growth but can’t get approved for funding because of bad credit. Fortunately, at SharpShooter Funding we have multiple options that your business may qualify for. Get in touch with us today through our website and learn more about how we could help you.