Equipment Financing Is Not Impossible with Bad Credit
If you have bad credit, the prospect of pursuing equipment financing can seem daunting. However, as this article shows, there are several steps you can take to make it possible.
Check Your Credit Reports
It is possible that your credit is not as bad as it appears. That is because errors can occur on credit reports. Obtain your personal and business credit reports, and if you see any errors, take steps to correct them.
Obtain a Cosigner
Those with bad credit may be able to lean on others to help obtain equipment financing. If you can find a cosigner, lenders may feel more comfortable extending funds to your business because their risk will be lower. Additionally, the money may come at a lower interest rate if a cosigner is involved.
Offering collateral is another option to make equipment financing easier to obtain. The equipment itself you hope to purchase can often act as collateral. If your business already owns other property or if you are willing to put up financial elements like accounts receivable, those can sometimes serve as collateral as well.
Offer a Large Down Payment
Making a large down payment is another way to make your business more attractive to lenders. This reduces the risk to lenders by lowering the amount of money they have to extend. It can also make the loan easier on the business by reducing the payment due each month.
Show Your Business in a Favorable Light
Even if your business has been somewhat shaky in the past, if its current performance is strong, lenders may be more willing to let you borrow money. For example, several months of bank statements that show a strong revenue stream can be strong evidence in your favor.
Want to learn more about other topics? Be sure to check out the rest of Fintrus’s blog posts.