Bank lending has slowed to a crawl since the financial recession and even good credit borrowers have had trouble getting loans. It’s made it nearly impossible for anyone with bad credit to start a business.
But are there other options for people with bad credit? Almost a third of Americans have a credit score below 640 FICO, the cutoff for a ‘prime’ credit score
Fortunately, there are two things you can do to start your own business even if you have bad credit.
Starting a Digital Business on Bad Credit
Digital businesses can be started and operated with almost no money. I’ve started each of my six websites with less than $100 and spend less than five hours on each per week.
There’s a directory of the best work from home jobs on the site but let’s look at a few businesses you can start on bad credit. 1. Running your own website 2. Website consulting and services 3. Social media services 4. Freelance work
Getting Money for your Business Startup on Poor Credit
Your second option is to apply for a peer to peer loan for money to start your business. Since loans come directly from investors instead of the bank, these are usually easier to get than a traditional bank loan.
Getting Money for your Business Startup on Poor Credit
While you won’t need much to start a digital business, you can also use a peer loan for startup costs. A loan for a few thousand is more than enough for any of the ideas.
If you do decide you need a loan to start a business, spend at least three to six months improving your credit score. Dealing with a bad credit score is easy enough if you know what influences your credit and how to boost your score.
1. Make sure there are no errors on your credit report 2. Pay off any high-interest, credit card debt 3. Consider debt consolidation to reduce the number of bills you have to pay