5 Outstanding Business Loans for Women with Bad Credit

And Other Options for When Business Loans for Women with Bad Credit Aren’t Enough

Bad credit can feel like a death sentence for your business.  It can make it seem as though you have reached a dead end before you ever get started.  This is especially true of women owned businesses as it is already more difficult for females to get business funding.  The truth is, there are ways to move past a bad credit hump.  It takes getting creative with funding and a lot of hard work, but it is possible.  Not only are there options like crowdfunding and grants that are not dependent on credit at all, but there are even business loans for women with bad credit.

Most lending institutions are not going to be looking to extend a business loan to those without a good credit score.  This is because they genuinely have no clue if your company will be able to repay the loan.

Some non-traditional lenders, however, will take a look at other factors to help them determine risk, meaning even if you don’t have the best credit, you can still get a business loan. These factors may include length of time in business, annual revenue, or any number of things.

Others simply work on a different model than traditional lenders.  Following are our top examples of each.

Top Outstanding Business Loans for Women with Bad Credit

Of course, this isn’t an exhaustive list, but it is a list of the 5 best loans for women with bad credit that we have found.

Business Loans for Women with Bad Credit: Lending Club

LendingClub functions as a peer-to-peer lender that offers mostly fixed-term small business loans. Borrowers that get loans from LendingClub generally use loans funds to buy equipment, finance growth or expansion projects, consolidate other debt, hire new employees.

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One benefit LendingClub offers with their small business loans than many others do not is access to a client advisor. This is someone to help you figure out how to best use your business loan funds, as well as how to budget loan payments.

The minimum loan amount at LendingClub is $5,000 and the maximum is $300,000.  You must have been in business for 12 months or more and have at least $50,000 in annual sales to qualify.  There can be no tax liens or bankruptcies, and you must have at least 20% ownership.  They will work with a credit score that is fair or higher.  A fair credit score ranges from 620 to 659.

Business Loans for Women with Bad Credit: Lendio

Lendio offers a loan-connection service that dramatically cuts the time it takes for small business owners to find the perfect loan.  They do the legwork by vetting a network of competing small business lenders. Funding is fast, sometimes in as little as 24 hours.

Potential borrowers submit one application and then see offers from lenders in the network.  The minimum loan amount is $500 while the maximum is $5,000,000.  The business must be U.S. or Canada based and must have a business bank account.  The minimum personal credit score applicable is 560.

Business Loans for Women with Bad Credit: Blue Vine

BlueVine offers two options for small business financing.  They include lines of credit and invoice factoring.  They also offer the ability to talk with a financing advisor, and their application process takes place exclusively online.  Their minimum loan amount is $5,000 and their maximum is $100,000.  To be eligible you must be in business for at least 6 months, have revenue of $120,000 per year or more, and have a credit score of at least 600.

Business Loans for Women with Bad Credit: Kiva

Kiva has a unique lending model. They offer loans to businesses, but their platform is far different from than that of traditional or even other non-traditional lenders.  It is sort of a cross between crowdfunding and lending.  They offer loans with a 0% interest rate, so even though you have to pay it back, it is actually free money. In addition, they do not run a credit check at all. The only requirement is that you have to get at least 5 family members or friends to donate money for your business, and you have to give at least a $25 loan to another business on the platform yourself.

Business Loans for Women with Bad Credit: Grameen

Microloans are a great option when it comes to business loans for women with bad credit.  Grameen is one of the few lenders that offers microloans specifically for women.  The loan amounts range from $2,000 to $15,000, and they also offer financial training and support.

As a bonus, they report payments to Equifax and Experian.  Consequently, these loans help borrowers build credit.

Other Options

Sometimes, even if you can find business loans for women with bad credit, it just isn’t enough.  There are other options that can help you bridge the gap between what you are able to borrower and the amount of funds your business actually needs to survive.

Merchant Cash Advance

If you own an existing business that takes credit card payments, a merchant cash advance can be a legitimate option. It works like this.  The lender takes a look at your daily credit card sales and extends a cash advance based on that average.  While they may check your credit, it rarely makes a lot of difference because the security for the loan is payments from future credit card sales.

The main difference that a low credit score might make is related to terms and interest rate. For example, a low score could result in a higher interest rate, or in payment drafts from credit card sales bi-monthly rather than monthly.  Sometimes with a merchant cash advance, payments drafts are weekly or even daily.

Grants

There are a number of grant opportunities available for women business owners as well.  While they are all competitive programs, they are definitely worth applying for to help support and grow your business.

SBA Women’s Business Centers

In addition to helping with loans, the SBA Women’s Business Centers also help women entrepreneurs get access to funding. Some lend money or award grants directly, while others help connect women entrepreneurs with financial institutions.

Eileen Fisher Women-Owned Business Grant

The clothing brand Eileen Fisher hands out $100,000 per year to 10 women-owned businesses. To qualify, a woman must have at least 51% ownership, and the business must be in operation for at least three years. Also, it must bring in less than $1 million per year in revenue and have a focus on environmental or social change.

Amber Grant

The Amber Grant awards $500 to $1,000 per month to a woman-owned business. One of the recipients also receives an additional $10,000 grant at the end of the year. Applicants only need to tell their story and turn it in with a $15 application fee.

#GIRLBOSS Foundation Grant

Specifically for woman-owned businesses in fashion, music, and art, the #GIRLBOSS small business grant awards $15,000.  They also offer exposure via the Girlboss website and social media platforms. Judges rate those applying on creativity, business acumen, planning, innovation in the field, financial need, and where they plan to work.

Cartier Women’s Initiative Award

 The Cartier Women’s Initiative Award is $100,000 for first place and $30,000 for second place.  They award the grant to 18 women entrepreneurs from around the world each year.  Women business owners who are just getting started may qualify.  Go here for the complete application information for this small business grant.

All of the finalists get to attend the INSEAD Social Entrepreneurship 6-Day Executive Program (ISEP). They will also have the opportunity to participate in workshops on entrepreneurship, business coaching seminars, and be exposed to networking opportunities.

How to Keep Bad Credit from Being a Problem in the Future

If you are looking for business loans for women with bad credit, it is unlikely that you have a strong credit score.  While this option will work for the present, it is important to ensure that going forward, bad credit is not an issue.  There is no reason to stay stuck in a bad credit hole. There are ways to dig yourself out.

Credit Monitoring

Monitor your credit reports.  Request a free personal credit report each year from Experian, Equifax, and Transunion. Look at what is being reported, and deal with any mistakes as soon as you can. You also need to keep an eye on your business credit.  We can help you monitor that at Experian and Dun & Bradstreet, the two most common reporting agencies, for only $24/month. See: www.creditsuite.com/monitoring.

You can monitor your business credit at the reporting agencies directly, but it is more expensive to do so.  For example, Experian and Equifax cost about $19.99 each, and D&B ranges from $49.99 to $99.99.

What’s are you looking for? You are looking for mistakes on your report.  Errors on your personal credit report(s) can be corrected, but you have to dispute in a certain way.  Generally, this means you mail a paper letter with copies of any proof of payment. These are documents like receipts and cancelled checks. Never send the originals.  Always mail copies.

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Itemize any charges you challenge, and make your letter as clear as possible. Be specific about the concerns with your report, and use certified mail so that you will have proof that you mailed in your dispute.

Business credit disputes can be handled as follows.

Dispute your or your business’s Equifax report by following the directions here: www.equifax.com/small-business-faqs/#Dispute-FAQs

You can dispute inaccuracies on your or your company’s Experian report by following the directions here: www.experian.com/small-business/business-credit-information.jsp.

D&B’s PAYDEX Customer Service telephone number is here: www.dandb.com/glossary/paydex.

Fund Your Business Without Using Your Personal Credit Score

This is also an option for those seeking business loans for women with bad credit. You do not actually have to use your personal credit score at all.  Your business can have a credit score all on its own. If you are not sure you have a business credit score, then you likely don’t.  You kind of have to be intentional with how you set up your business for that to happen.

For example, you need and EIN, a D-U-N-S number, and a few other things before you can have business credit.  Your business has to appear as a separate entity from yourself.

What Does Your Business Need to Be a Separate Entity?

  • A professional-looking website and email address. The website address needs to be bought from a supplier such as GoDaddy. In addition, the email address needs to have the same URL.  It shouldn’t be a from a free email platform like Yahoo or Gmail.
  • A company telephone and fax numbers that is different from your personal numbers, and they need to have a listing on ListYourself.net.
  • Additionally, the company phone number should be toll-free (800 exchange or comparable).
  • A business bank account devoted strictly to the company is always a must.
  • To be a formal corporation. This means organizing as an LLC, S-corp, or corporation. You cannot operate as a sole proprietorship or partnership and build business credit properly.  Base the option you choose the level of protection and the tax benefits that you need.  For company credit report purposes, they all work the same.

Once you have these things in play, any payments you make on accounts in your business name using your EIN will be reported to the business credit reporting agencies in your business name.  This is how business credit starts to grow, and you can eventually leave your personal credit out of the mix.

You Have Options: Business Loans for Women with Bad Credit Really Do Exist

Business loans for women with bad credit are out there.  We gave five outstanding places to get started.  However, there is more to the business funding process than just finding a loan despite bad credit.  You have to have a plan to overcome the bad credit in the long term.

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The best way to do that is to ensure you pay all accounts on time, consistently.  In addition, work on building your business credit so that you do not have to depend on your personal credit for business funding.

Do not underestimate the importance of this.  By using your business credit to fund your business, you keep large business expenses, or business issues, from affecting your personal credit score.  This means despite what is going on business-wise, you can still maintain the credit you need to buy a home, a car, do home improvement, etc.

Consequently, if you run in to personal credit issues, your business credit can remain unaffected.  This means your business can continue to run successfully despite a poor personal credit score.

 

 

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