A poor credit score can have a huge impact on your personal finances. In some cases it can restrict you from getting certain types of credit or even stop you from getting credit altogether. For individuals, dealing with a bad credit score can be tricky enough, but if you’re hoping to start a business, having a poor personal credit score can create further obstacles. This isn’t to say that those with a bad credit score should forget the idea of starting their own business. In fact, if you know where to look and who to turn to, there are plenty of financing options designed to help those with a poor credit rating overcome this and successfully launch their business.
FundingThose with a poor credit score often find that they have more issues than most when applying for business funding, as this can often get in the way and prevent lenders from agreeing to provide them with a loan. If you’re an aspiring entrepreneur with a poor credit score, it’s probably best to simply bypass the big banks and look into other, alternative methods of obtaining start-up capital instead. Thankfully, there are various different ways in which entrepreneurs can get funding, even if their credit score isn’t the best. For example, crowdfunding or angel investors are quickly becoming some of the most popular alternative methods of funding a start-up.
Payment MerchantsAnother obstacle to be faced by entrepreneurs with a poor credit rating is being turned away when applying for a merchant account. In today’s day and age, customers expect to be able to make payments by credit card and failing to allow them to do so could actually damage your company’s reputation, something that you’ll want to avoid as much as possible, especially when you’re just starting out. Along with that, if you’re planning to sell products online, chances are you won’t be able to go ahead without a merchant account set up so that your customers can make secure payments via their credit card when shopping online. Highriskpay.com provides a merchant account service for entrepreneurs who are deemed ‘high risk’ or have a poor credit score.
Rebuilding Your Credit ScoreAlthough there is a variety of methods that you can use in order to get around the common obstacles faced by entrepreneurs who have a poor credit score, one of the most important things that you will need to do is start working on rebuilding it so that in the future, you can avoid falling into any further tricky situations. Whilst running your business, you should ensure that you take all the steps necessary to improve your credit score, for example by paying off past debts, setting up regular payments, or even using a specially designed credit card for helping you to rebuild your score.
As a small business owner, a bad credit score is always threatening to get in your way. Luckily, there are many things that entrepreneurs can do to beat this.