There are plenty of reasons to want to open up your own business, but right now it is one of the few ways to fight back against unemployment. However, being out of work can cause you to get behind on bills and then your credit report goes into the tank. There is hope though as there are ways to get small business loans for people with bad credit.
Bad credit does cost you, but it is not the end of the world. As long as you are pro-active about it, you may still get approved for a small business loan. Get a credit report on yourself and see where you are at. As you go over the report, make notes as to why things happened and be ready to discuss them in detail with a lender.
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.
The first step in wowing the SBA is to have a professional business plan. This is the most important document that you are going to prepare for them and you want to make sure that it is done right. If you have no idea how to do one, hire someone who can. It will be the best money that you have ever spent.
However, even the most prepared still find themselves with the challenge of getting approved. Before you ever go forward, make sure you have a backup plan. This means that you want to find people that are willing to co-sign for you and help get this loan approved. Worst case scenario you offer them dividends during the life of the loan.
Going out on your own can be a scary thing, but if you believe in your idea and the SBA is behind you, you have a very good chance of succeeding. Everyone works harder when they are doing it for themselves. By following the tips above, you are one step closer to getting that financing and becoming your own boss.
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