How to get a Small Business Loan with Low CIBIL Score? |
Posted: December 10, 2018 |
Today, credit scores usually act as a calling card for most small businesses, and a bad score can make availing the desired financing significantly difficult. It is a noticeable trend among banks and NBFCs to constantly devise ways to reduce risks. Hence, the last thing they’re looking for is to lend money to an individual who might not be able to make timely repayments. The ideal score is considered to be 750 and above - which is beneficial for availing not just the desired loan amount but also flexibility in interest rates. Bad credit, as defined by FICO, is a score between 300 to 629, and is one of the most common reasons why lenders reject small business loan applications. Naturally, individuals or businesses with poor credit score are placed at a higher risk of defaulting on a loan. However, even with a bad credit score, one can still avail financing options from digital NBFCs like Clix Capital. Online Lenders Funding from banks for small businesses is an all-time low because of a large number of rejected applications. Even business owners having decent track records and healthy financial situation has trouble in availing loans from a bank, all thanks to the ever-rising requirements. Banks typically require a minimum of 700 credit score, in addition to meeting the rest of the strict criteria. So, if you have a low credit score, availing instant business loans from banks isn’t advised. For this reason, online lenders have become vastly popular in today’s financial scenario. Online lenders like Clix Capital work just how banks do, with a few differences - such as they work faster, are easier to qualify now, and have shorter business applications, among other things. Invoice Financing Invoice financing is a kind of loan product that the borrower can qualify for if they invoice their customers for their products or services and those customers are other businesses. By invoice financing, financiers can offer borrowers a cash advance equal to around 80-85% of the outstanding invoice amount. When the customer pays back the invoice, borrowers will receive the remaining 15%, excluding any fees incurred. Here’s a few things borrowers with low credit score need to consider before choosing a financing option:
Small business loans make it possible for businesses to make essential purchases related to inventory and equipment. Even if one has a bad credit score, it is still possible to avail loans. Wondering how to apply for a business loan online with a ‘not-so-good’ credit score? Find a lender that understands your situation, like Clix Capital, and avail instant business loans!
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