Whether you’re a budding small business operating from your spare room or have been in operation for a while, most businesses will need some sort of financing at some point. Unfortunately, business loans are notoriously tough to get, and many business owners have stopped even trying because of their poor or inexistent credit history.
However, you have tons of different alternatives available these days, and having poor credit is no longer as crippling as it used to be. Let’s take a look at some of the alternatives you could consider if you need financing for your business.
Payday Loans
If you managed to keep your job while you’re running your business, you could always use this to your advantage. Know that there are plenty of services that will lend you money based on your income. You won’t necessarily have to pay it back with your next pay packet either; you can work out a repayment plan that will allow you to pay the principal back over the course of a few months.
However, always make sure that you go with payday loans direct lenders only. This will eliminate the middleman and allow you to get the best rates. If you’re looking for a bad credit direct payday lender, check out BingoLoans. They will allow you to borrow anywhere from £50 to £1500 and will give you access to funds within 24 hours from approval in most cases.
Peer-to-Peer Lenders
Peer-to-Peer lending is one of the greatest innovations in the world of business finance. Peer-to-Peer lending allows people to directly loan money to individuals and businesses, and offer their own terms and rates. These loans are usually overseen by a Peer-to-Peer lending platform that handles most of the vetting for both lenders and borrowers.
However, don’t assume that anyone can just come in and get a loan. For one, businesses that want to access Peer-to-Peer lending need to have at least 2 years of activity reported to the Companies House. They also need to have at least £100,000 of annual revenue.
Invoice Finance
Invoice financing is another option that you could consider, but this is only a good option for a certain class of lender.
For one, you need to have fairly large accounts receivables to get any sort of benefit from this method. You won’t be able to stretch out your payments over a long time period either.
How invoice financing works is that it allows you to borrow money against invoices that haven’t been paid yet. You will receive a fraction of the money upfront and will have to cover for the fees. This is a great option if you’re having some sort of immediate need, like an urgent repair, or have to cover for critical functions like payroll for instance.
So, now you know that there is a world of options out there, make sure you learn about them in detail and see which one would be the best for the needs of your organisation. Also, make sure to only borrow what you can handle, and use the opportunity to rebuild your credit.