How To Get A Business Loan With Bad Credit
Posted on June 17, 2008
Filed Under Business Loans | Leave a Comment
Before setting up a business, there are two important questions that you must consider: Are you financing your business from your personal assets? or Are you applying for a business credit? If you choose the latter, it is important to review your credit history.
Although it cannot be avoided for your credit history to be reviewed whenever you’re applying for a loan, however, this should not hinder you from setting up your own business. The credit history review would play a role in determining whether your business loan application would be accepted or rejected.
A good credit history can help you qualify to a loan with great rates, terms and conditions. On the other hand, if you have a bad credit history, you do not have any choice but to settle for a bad credit loan. A bad credit loan is designed to help people who have bad credit history. Unfortunately, not every lender offers these kinds of loans. Do not take that as an obstacle that you cannot overcome but it must motivate you to look for lenders who are willing to offer bad credit loans.
Terms for a Bad Credit Loan
It is natural for the lender to charge a higher rate of interest for people with bad credit history, since these people are considered to be a risk factor in lending a loan. You must be prepared to pay higher closing costs, processing fees and others as compared to a normal loan. However, you will be assured that your application will be accepted even if you have a bad credit score; this is a definite advantage despite the high rate of interest.
If you review and compare the loans, almost all of them are similar to substandard ones but you must understand the reality that because of your bad credit score, these loans are the only chance you have. There is no other lender who would accept your application.
Improving the Chances
You have the option of applying for a secured loan to help improve the chances of the application to be accepted. In a secured loan, the borrower is required to pledge a type of security when he or she applies for a loan. By doing so, the lenders would not be at risk. In the event that the borrower defaults on the payments, the lender can easily retrieve the amount. There are several lenders who are more open to the subject of a secured loan and it might not pose a difficulty for you to convince a lender in spite of your bad credit rating.
You can also improve the chances of your application to be accepted by building credit worthiness before applying for a loan. You can do this by never defaulting on payments, keeping your banking transactions and others free of errors. If you done all of this, then you can apply for a loan. This only shows that despite your bad credit history, the recent pattern in your transactions is developing healthy payment habits. Credit worthiness is the most important determining factor regarding the issue of the chances of your loan getting approved.
Payments
Once your loan has been accepted, the last thing you are required to do is to always make sure that you make your payments on time. Doing so would somehow clear your bad credit history and allow you to apply for proper loans and not on bad credit loans.
Bad Credit Small Business Loans
Posted on June 14, 2008
Filed Under Business Loans | Leave a Comment
It is a common fact that businesses wouldn’t run as smoothly without capital. Even with a fixed investment for your mini-business, there are always unexpected expenses that will crop up from time to time. The only way to solve this problem is through small business loans. But, is it possible for someone who has a bad credit rating to avail such financial help? Yes, they can!
It is true that having a bad credit rating can hinder the possibility of vying for a financial loan to help your small enterprise. Many traditional and conservative financial institutions, like banks, are only accepting individuals with good credit scores, and shunning of the rest. But that is no longer the case today.
Secured and Unsecured loans
Considering the number of financial lenders in the market, many stay on the competitive side by offering small business loans despite bad credit status. These loans come in two basic forms: secured and unsecured.
Secured loans are financial aids with collateral as security, which can either be in residential or business property, or any assets with the same value. Unsecured loans are the opposite; lenders will give you the financial help you ask without any security at all, which can be useful if you don’t have any plans in putting your assets at further risks.
Secured loans, however, allow you to loan larger amounts, unlike its counterpart, at lower interest rates and better payment terms. Unsecured loans are usually attached with a much higher interest rate, and much stricter payment schemes.
Also, unsecured loans require in-depth credit checks and assurances before you can be accepted for one. Since this type of loan is very risky, especially on the lenders point-of-view, they need to maximize the possibility of getting back what is owed in case things go wrong.
However, this can be easily achieved by approaching SBA or Small Business Administration for help. This organization will act as assurance to the lender regarding the unsecured loan despite your bad credit status.
Even if you have a bad credit status, you can easily get a small business loan by having ready documents that will testify the financial stability of your business. If you’re venture is earning a sizable income, you can provide financial statements like balance sheets and income statements to give evidence to that fact.
Looking for a lender
When you search for a lender of a bad credit small business loan, you need to take into consideration some areas before you proceed. First, you need to keep in mind on the condition of the loan before you get one. Take into consideration interest rates, and payment terms and conditions if you can cope up with it.
This is usually the case when you go for secured loans, and using your properties as security. You need to keep in mind that failure to pay these loans can cost you your assets, as well as your business venture.
Also, this is a fine opportunity for you to build up your credit score while going for the bad credit loan. Try to look for one with payment schemes that you can readily afford. Prompt payment for these can boost your credit scores up a notch, which will improve of getting much better financial aids in the near future.
7 Ways To Control Your Debt
Posted on June 6, 2008
Filed Under Debts | Leave a Comment
1. Stop Using Your Credit Cards By Hiding Them!
Put them somewhere where they will not tempt you. You may consider keeping at least one card for emergency purposes. Additionally, with poor credit, you may find it more difficult to get a credit card in the future. If you keep at least one account open, then you won’t have to worry about applying. One tip, put your credit cards in a zip lock bag, put the zip lock in a container of water and place the container in your freezer. Not only will the cards not be tampered with, you won’t be able to use them on impulse!
2. Take a Look at Yourself in the Mirror and Ask Yourself…
Are you true to yourself? Taking a good hard look at your financial situation, particularly if it isn’t good, can be very difficult. Yet, to get out of debt you have to fully understand what the situation is.
3. Check Your Credit Card Statements for Any Errors
Believe it or not, up to 40% of all credit reports have errors in them. If you find that your credit report shows something that is not true, you need to write to them with all the details. Be sure to use certified mail so that you can keep track of who you wrote to, when you wrote, and who received the mail on the credit bureau’s end. Then ask the credit bureau to send a corrected report to anyone who has requested a report on you in the last 6 months.
4. Find Omissions
By law, you are allowed to add information to your report that you believe will help your rating. This might be additional information about a repayment of a loan, good credit you have with companies that do not report to the credit bureau, or salary increases.
5. Devise a Plan
Whether you determine to pay your bills down little at a time, take a second job, go to credit counseling, or file bankruptcy, you need to make a plan and stick to it. In order for your credit to be improved, you have to have a plan and then take action!
6. Don’t Run From Creditors and Talk with Them
Creditors want their money. They do not want you to default (quit paying). In fact, most creditors will work with you to get a reduced payment schedule. If you can keep them from reporting you to the credit bureau, then it won’t hurt your credit. The catch here is this: be sure to stick to the new negotiated plan - they won’t renegotiate if you fail to comply.
7. Have Patience
Have you ever heard the saying ‘time heals all wounds’? It also heals your credit. After 7 years, most items will be dropped. This is good news if you are working to correct your credit. As each year passes, more and more bad items will drop off and more and more good items will be included. Eventually, the disease will be cured.
How to Apply for a Business Loan
Posted on June 3, 2008
Filed Under Business Loans | Leave a Comment
The process of applying for a business loan is a stringent one as compared to the standard procedures in obtaining a home mortgage loan or a personal loan. This is probably due to the fact that business loans contain a greater risk element as compared to other loans. Therefore, lenders need to exercise greater caution and emphasis when evaluating business loan applications in order to minimize their risk exposure.
With that, lenders evaluate their applicants based on the information that are provided as well as their judgment of the viability and profitability of the business being financed. Thus, business loan applicants will be required to submit a loan proposal along with their applications with the purpose of creating a positive impression upon the lender.
The first element of a loan proposal is an executive summary, providing short descriptions of the type of business and the industry, the purpose and usage of the loan, the proposed repayment conditions as well as the intended loan period. After that, the company information is provided, enriching the reader with the nature of the business, the location of the business, company history, the products or services provided, key differentiation factors of the company or the product, the general growth of the industry, competitive information, growth potential and target customers.
It would help if you could include your company marketing strategy, detailed product information, historical information as well as projected growth plans for the company. Apart from that, if you plan to incorporate product or service extensions in the future, you should provide these descriptions within your loan proposal. If possible, geographical expansion plans will help in the proposal.
The next area that needs to be showcased in the proposal would be the credentials and experience of each member of the management team. Impressive credentials will provide assurance to the lender that the company is managed by individuals who are responsible and capable. This is important as having the wrong people managing the company could be detrimental for the business.
In any loan application, historical records are essential to be used in evaluating the performance of a company. As new companies do not yet have these records, the financial records of the owners will be used as the basis of evaluation. Income tax returns forms are also required by lenders. All of these records provided should be the latest copies less than 90 days old, with the exception of the income tax returns form.
If the loan is applied for an existing company in active operations, company financial statements, including profit and loss accounts, balance sheets and the net worth reconciliation record should be included in the loan proposal. Again, all of this information should also be the latest and less than 90 days old. Additionally, a listing of accounts receivables and other short term and long term debt should be attached.
On the other hand, if the loan application is submitted for a new business, a pro-forma balance sheet and profit and loss account should be provided. Apart from that, a cash flow projection for the upcoming year is drafted to indicate the possibility of recovering the debt. This also means that projected revenue, profits, costs incurred and expenditure should be listed out with definite explanations provided as well as a list of assumptions.
If you possess assets that you wish to use as collateral for your loan, details for this should be provided to the lender as well. It is often common for lenders to request for dual sources of repayment in the event that one source is defaulted. This means that if the business owner defaults on his repayments, the collateral can be sold in order to recover debt.
Finally, other documents normally required for a loan application would be items like the article of incorporation, lease agreements, partnership agreements, license, references, etc. As the list of required documentation, information and attachments differs between lenders, it is best to check with the individual lender on their specific information and documents required to be attached with the loan proposal.
About the author:
Matt Bacak, The Powerful Promoter and Entrepreneur Magazine e-Biz radio show host, became a “##1 Best Selling Author” in just a few short hours. He has helped a number of clients target his specialty, opt-in email direct marketing systems. The Powerful Promoter is not only a sought-after internet marketer but has also marketed for some of the world’s top experts whose reputations would shrivel if their followers ever found out someone else coached them on their online marketing strategies. For more information, visit Bacak’s site at http://www.powerfulpromoter.com or sign up for his Powerful Promoting Tips at http://www.promotingtips.com
 | US $89.99 End Date: Tuesday Feb-09-2010 5:25:35 PST Buy It Now for only: US $89.99 Buy it now | Add to watch list |
Foreclosure Prevention / Loan Modification Business
 | US $34.95 End Date: Friday Feb-12-2010 17:58:13 PST Buy It Now for only: US $34.95 Buy it now | Add to watch list |
Foreclosure Prevention / Loan Modification Business
 | US $34.95 End Date: Friday Feb-12-2010 17:58:59 PST Buy It Now for only: US $34.95 Buy it now | Add to watch list |
Foreclosure Prevention / Loan Modification Business
 | US $34.95 End Date: Friday Feb-12-2010 18:08:24 PST Buy It Now for only: US $34.95 Buy it now | Add to watch list |
Loan Modification Service Business /Housing Counseling
 | US $34.95 End Date: Friday Feb-12-2010 18:09:52 PST Buy It Now for only: US $34.95 Buy it now | Add to watch list |
What Is A Credit Score?
Posted on June 2, 2008
Filed Under Credit Score | Leave a Comment
You just want to get a loan and suddenly you are bombarded with all this questions about your credit score. And you don’t really know what to answer since you don’t even know what a credit score is. This article will explain it to you.
A credit score is your credit grade, representing how much of a good creditor you are. This score is dependent upon your credit history and credit report information, which is gotten from credit bureaus and credit reference agencies such as Equifax and TransUnion. Banks, credit card companies and lending companies use the credit score to have an idea if a person will pay what they borrowed in time. These scores are used to help these companies calculate their risk and determine if you’re qualified for a loan or not.
Another use of credit score is to determine how many percent interest rates will be given to the borrower and what will be the terms of payment. People with high credit scores will be given more time frame to pay their debts and much lower interest rates.
A person with a bad credit score may be given shorter terms in their payments but high interest rates. This is because they are riskier to lend money to so the banks and lending companies would want to get a high interest from them at shorter periods of time.
Because of the importance that credit score information gives to companies, banks and lending companies are now not the only ones that use these information. Even mobile phone companies, insurance companies, and private companies also use this information to check on the background of their clients and potential employees and see their character.
There are actually a lot of ways to determine what a person’s credit score is. One of the most popular is the FICO score which was created by Fair Isaac Corporation. FICO is being used by lenders of mortgages to determine which borrowers are likely to default on their payments. A FICO credit score can range from 300 to 850.
It used to be only the financial institutions have access to their credit score, but now it is being commercialized. Equifax is actually offering consumers a glimpse of their FICO score through their website for a fee, $12.95. The same goes with other credit bureaus such as TRansUnion and Experian but what they are offering is not the actual FICO score but their own scores.
Both companies however swear that their scores are comparable to the FICO scores. Experian charges the same price as Equifax for their score, $12.95 while TRansUnion charges $9.00 for a credit report that will also have the credit score. This can be purchased by mail, through phone and of course, the easiest course, online.
Some however do not see the need to buy these things as they are entitled to a free credit report from each of the three agencies. Some states even give a free credit reports within 30 days of being rejected of a credit by a lending institution or when they receive a not so good credit terms because of their credit score.
