As you may have experiencedTrying – and failing – to get bad debt financing is one of the most frustrating vicious cycles in the business world.
On the other hand, you need to upgrade or buy new equipment to generate revenue and profit, open accounts, pay off your debts, and ultimately strengthen your credit score.
However, on the other hand, banks will not give your loan application a second look unless you have different personal and business scores.
In the past, business owners caught in this crisis often had to scale back their business, sell it ASAP, or close it down.
Fortunately, that is no longer the case because “credit machine financing” is no longer a contradiction in terms. Rather, it is a the solution empowering business owners across the country every day.
So, if you are looking to get financing for equipment with bad credit, just read on find out how:
Can You Get Bad Credit Financing?
Most business owners – and all successful ones – are familiar with promises and claims that seem too good to be true.
And at first glance (and maybe the second and third too!), you might wonder “what's the catch”. After all, there must be a reason why non-bank lenders offer bad debt financing while banks don't even want to consider it.
The simple truth is that non-bank lenders are more comfortable with risk than banks and credit unions. What might indicate a red flag to a bank doesn't always matter to a non-bank borrower, allowing a wider audience to access capital solutions, even with partial financing.
So, can you get bad debt financing? The answer is yes!
It is entirely possible to get financing for equipment with bad credit, although the options may be limited and the terms unfavorable.
Lenders specializing in high-risk mortgages and other sources of financing, such as National Business Capital, often provide financing solutions to businesses with substandard credit scores.
Equipment Financing Rates, Terms, and Financing Period
When it comes to getting financing for credit machines, remember that every business is different and has it different funding objectives to grow their company with new or improved equipment.
National Business Capital can connect you with equipment loans and lines of credit with interest rates, terms, and amounts that can fit any specific needs of any business owner.
- Property Loan Rates: $100,000 – $10,000,000
- Goals: 1 – 5 Years (Fixed and Flexible Payment Schedules Available)
- Time to Get Funding: 48 Hours to Access Funds (Average)
When applying for equipment financing, it doesn't matter what your credit score is, speed and flexibility are very important to avoid hiccups in business operations and disruptions to your income down the line.
Make sure you find a reputable organization, such as National Business Capital, that works closely with you to customize your equipment loan so you can get the equipment you need – exactly when you need it – and maximize your long-term business growth opportunities.
Easy Appliance Loan Approvals for Bad Credit Borrowers
And what we know best – if we do say so – is to understand that credit scores are not, and never will be, the best or only way check it out eligibility of the business owner.
There are many variables and factors to consider. In our opinion, the most important question to ask is not what the business owner did in the past, but rather, what they are doing today and what they plan for tomorrow.
If we remove the focus from the past until now and in the future, we're changing the underwriting paradigm — and that means bad debt financing is no more. In fact, since we approve nearly 90% of all business loan applications, the chances of getting “yes” for us it is very possible.
What Types of Businesses Can Get Bad Debt Financing?
Any business that needs equipment for business purposes can secure equipment financing, even for bad credit. Here are a few of the many businesses that can use this type of financing.
Any business that wants to buy equipment can finance it instead of buying it outright. Usually it is a a better financial moveand, since financed equipment may qualify for tax deductions, such as Section 179, which reduce the amount owed on your annual tax return.
How to Get Loans for Bad Credit
Your credit score shouldn't stand between your business and its full potential. Here are a few strategies to protect against bad credit financing, even if you have a less than favorable FICO score.
- Work with non-bank lenders – Banks and credit unions care more about credit scores than non-bank lenders, who often place a business's profitability above its credit history. For this reason, it is easy to access the authorization that allows you to secure the equipment you need.
- Use a financing product with no minimum credit score-Some solutions, like cash-based financing or an account receivable, don't always come with a low credit score. Borrowers with bad credit can get approved quickly and buy the equipment they want.
- Continually strengthen your credit score – If possible, you should spend time building your credit before applying for a loan. You can pay off balances on credit accounts, have delinquencies removed from your record by the credit bureau, make timely payments to vendors, and avoid opening new credit accounts in the time leading up to your application.
- Work with the financial market – Marketplaces bring together many lenders in one place, allowing businesses to apply together and get the best offers that suit them. This not only saves time, but also allows borrowers with bad credit to quickly find the best options for them.
Are You Eligible for Bad Credit Services?
Nationwide makes approval fast, easy, and convenient for all types of business owners from all industries and all credit profiles. Here's what you need to qualify for bad credit home financing:
- $30,000 in Monthly Gross Sales
- 6+ Months In Business
When you meet them two requirementsyou have a much higher chance of being approved for financing for the device of your choice.
If you do not meet the above requirements, you must have a FICO score of at least 650+ to qualify.
In addition, no collateral is required on behalf of the borrower to obtain financing for the property. Instead, the new or used equipment will be used as collateral itself, protecting the borrower's business and personal assets.
With National's streamlined qualifications and streamlined approval process, over 90% of all bad credit business owners get approved for our financing programs.
Equipment Loan Calculator: Rates and Terms That Work for You
If you want a better idea of the terms and conditions that come with your financing option, use National's business financing calculator by clicking the link below.
Once you've been directed to the property loan calculator page, use the sliders to find a property loan or line of credit with terms, rates, and values that fit your needs perfectly.
Go to the Equipment Loan Calculator
How to apply for bad debt financing
The main point? We know that some very talented business owners may have poor or bad credit. At National Business Capital, we are honored to be part of a business's success story, whether they have good credit or not.
To learn more, contact our team today by filling out our digital application or calling 1-855-866-9844. Find out how straightforward and stress-free it is to get bad debt financing and position your business to thrive for years and decades to come.
FAQ
What interest rates should I expect on bad credit?
With bad credit, expect higher interest rates for equipment financing as lenders view you as a higher risk. Rates can vary greatly but are usually well above the prime rates to compensate for the increased likelihood of default.
The exact amount depends on the lender, the level of credit issues, and the specific terms of the financing agreement.
Are there certain lenders that work with bad credit applicants?
Yes, there are some lenders who specialize in bad credit applicants for equipment financing. These include some lending institutions, online lenders, and some financial companies that specialize in high-risk loans.
These lenders often have flexible terms and may offer financing solutions that suit businesses with less-than-ideal credit histories, although often at higher interest rates.
Will I need to provide additional collateral?
If you're looking for bad credit financing, you may be required to provide additional collateral beyond the equipment you're paying for. This collateral acts as additional collateral to the lender, reducing the risk associated with your credit history.
Specific requirements may vary by lender, but providing additional assets can improve your chances of getting approved for a loan and securing favorable terms.
How can I improve my chances of getting approved?
To improve your chances of getting approved for equipment financing, especially with bad credit, consider offering a down payment to lower the loan amount, provide more collateral, and get a co-signer with better credit.
Showing strong business finances, a stable income, and a solid business plan can also help. Dealing with professional bad debt financing lenders increases your chances of finding the right financing solution.
Does financing affect my business credit score?
Yes, equipment financing can affect your business credit score. Paying on time can have a positive impact on your score, demonstrating your creditworthiness to future lenders. Conversely, late or missed payments can damage your credit score, affecting your ability to secure financing in the future.
