How do I Fund a Small Business in Missouri With Bad Credit?
In Missouri, the Small Business Development Center provides counseling and assistance to help you find the funding you need for your small business. Staffers can help you with the strategies needed to secure funding without seeking outside sources. When looking for funding, start with the Small Business Development Center. Through resources available to them, they may be able to secure the funding you need even if you have bad credit. If this option does not work for you, there are other options you can use to get funding for your business. Take the time to review all options thoroughly.
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Instructions
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Use private loans from family and friends. In most instances, you will be able to secure funds immediately. This is the best option when you have bad credit. Write a business plan and project when your investors might see a return. Supply a contract with private loans explaining the terms of repayment. People will listen if you have a well-thought-out business plan.
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Seek lender and credit card companies who will accept businesses with bad credit. The interest rate on these type of loans will be high. Credit cards will only give you minimum credit limits, but with regular payments they will increase your credit line over time. Lenders may require you have a co-signer to secure the loan. The criteria is rigid, but you can get funding.
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Research micro-lenders. These are non-bank lenders who will loan you money. The amount is typically in the $5,000 to $25,000 dollar range. These lenders are not as strict as banks. They are generally web-based lenders that require collateral. The terms are more flexible than the traditional bank. The qualification process can take up to 60 days.
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Locate gifts and grants. Gifts and grants are free, but it will take a lot of homework on your part to find and apply for these types of funding. Gifts include start-up costs from similar business that may sponsor you, or free products and services from organizations in your area. Grants are awards you need to apply for. Contracting with a grant writer is a good way to increase your chance of winning grants. Grant writers will sometimes wait and get a percentage of the award or they may request payment for services in advance.
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Use your home to get a line of credit to fund your business even if you have bad credit. Contact your lender for the terms associated with this type of loan. This type of loan is risky because your home is your collateral. Do not borrow more than you need. Take the time to search a reasonable interest rate (see Resource 3).
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Tips & Warnings
Beware of loan scams; do not respond to random e-mails or letters.
Review any contracts with a third party. You are eager to get the loan, and someone on the outside will be more critical and recognize the red flags.
References
Resources
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