Poor Credit Score

Businesses find it extremely hard to meet the eligibility for business loans from financial institutions such as banks. The strict qualification, a long list of documentation, and lengthy approval times are the significant problems with the process. And your application process finishes right at the beginning if the credit history is not good.

Credit history is a financial report card with all the previous liabilities and payment records. Banks will not trust you as a lender if you or the business have failed to make payments on time. However, many options are left to get a business loan, but only a few with reasonable interest rates.

Here, we will guide you to get a manageable business loan even with a poor credit history.

Financial Forecast

The first thing a lender wants is an assurance to get the money back from the borrowers. They don’t want to go through the process of law suite or repossession of an asset. A financial forecast will provide them with some level of assurance to get the money back on time.

You can take the help of the financial experts to create a profit or loss forecast for the upcoming months. The process involves multiple scenarios with honest analysis, no biases towards optimism. Lenders will ask for a breakdown of the sales process.

It is a research-intensive process where you need records from the past and present. You need to make it as realistic as possible to convince the lenders. The actual income will depend on various factors that make the forecast heavily unpredictable.

Present Financial Condition

The present financial condition is a better way to measure affordability than some missed payments 4-5 years ago. At ForeverFinances, we offer loan to the customers based on their present financial status. This allows us to serve a larger audience that goes unnoticed because of bad credit history.

You need to show the account statement of the past few months to get approval. The borrowers need to convince the representative for the affordability of the loan. You can prove it with the income-debt ratio.

Your credit history will be assessed to find the list of liabilities and instalments. It will help the lenders calculate the income/debt ration before approving the loan amount. Ensure the lenders conduct a soft enquiry to avoid negative impacts on the credit history because of application rejection.


You can use a guarantor with the perfect borrower’s profile to get a loan for the business. Lenders will even offer low-interest rates based on the credit history and income of the guarantor. You will easily get long term loans for bad credit with manageable instalments.

However, it is never easy to find a guarantor willing to take a risk on your behalf. They are responsible for making the payments if you fail. Their credit profile will suffer, and this will impact their future loan application.

If they reject, the relationship may get affected by an awkward situation. For some people, the benefits of guarantor loans are not worth the risk. However, you should consider it if you are assured of the repayment.

Personal Credit

You can use personal credit to cover the bad credit history of the business. The lenders will use your responsible financial behaviour to approve the loan application. However, you are responsible for the repayment if the business has to go down.

This is riskier than the business loan, where the owners don’t take responsibility for the loan. The loan terms will remain the same, with only the chances of approval will increase. Nevertheless, your secondary sources of income may help you strong-arm the lenders on offered interest rates and terms.

Instead of a business loan, you can use the personal credit history and other details to get some other financial support. People take personal loans or short-term loans for a temporary fix to the cash crunch. They are easier to get approval to compare to the complex process of a business loan.

Write a Business Plan

You need to present a detailed plan if you want the loan amount to start a business. The pain is significant to create an impression on the representative of lenders. It will help them decide whether the business will make money to repay the loan.

The plan should include the problem your business will solve for the customers. Your strategy on executing the plan and solving the problem is the essential part of the plan. It should be feasible for the business with the investment to execute the plan without running out of cash.

How to Apply for the Loan?

The business loan application at banks depends on the loan amount. The local branch approves the smaller amounts while the larger amount is sent to the Central Credit Control Department for approval. It can take days to weeks because of the age-old process with only development in computers.

On the other hand, direct lenders serve a smaller audience that means faster processing of a loan. You need to fill the online application form and submit the documentation. It will take only a few minutes before our representative will review your application.

The approval is offered the same day, while the fund disbursement can take up to 24 hours. The representatives will guide you throughout the process to make sure there is no miscommunication.


To sum up, there are more ways than ever to get financial support for a business with bad credit. They have their benefits and drawbacks that may help you narrow down the search. Therefore, some research about different loan types is recommended to get the best deal on business loans.

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