While the small business lending
landscape has been steadily improving over the past year, challenges still
remain, particularly for companies that have less than stellar credit
histories. Many banks are not willing to provide capital to small business
owners who have below average credit scores.
There can be valid reasons why a
company might have a poor credit history. During the Great Recession of
2009-10, many small businesses fell behind in payments to vendors or simply
could not correct their cash flow issues quickly enough. After all, the hardest
time to secure credit is when you are desperate for it. The black marks on a
company's credit history can take months -- even years -- to erase.
Fortunately, there are lenders who
are willing to take chances on a small business owner who may have run into
some short-term financial problems and startup companies that have no credit
history whatsoever. However, remember the lenders are usually not "brand
names" in the financial services industry; and the interest rates and fees
can sometimes be higher than those offered by traditional banks.
No comments:
Post a Comment