Starting a business? Use These Tips to Find Funding and Raise Your Credit Score
October 7, 2020 | Emma Frost
How do you find financing for your business? Finding business funding is difficult for anyone, but it can be especially difficult if you don’t have a good credit rating. These tips will help you raise enough capital to kickstart your small business. Tips like how to quickly improve your credit score and where to get emergency funds like online merchant cash advances to tide you over when your resources run short.
Tricks To Raise Your Credit Score
Get Your Credit Report
It’s important to get a yearly credit report. You need to review your score and identify possible factors that are pulling it down, or errors that you can dispute.
Pay Bills On Time
This is the simplest and most effective way to improve your credit score. Set up payment reminders, and if you can, pay every two weeks. The combination of consistently meeting payment deadlines and lowering your credit utilization will make a big impact. In fact, just three to six months of paying your bills on time can pull up your score by several points.
Negotiate With Creditors
If you are behind payments, or have accumulated a lot of credit card debt, call your creditors and negotiate for a realistic payment scheme. This will help you avoid the accumulation of late payment fines, and protect your credit score.
If you have debts on several credit cards, pay off the ones which you have maxed out or are close to the credit limit. That can improve your credit score more quickly than paying small amounts on several cards.
You can also apply for a debt consolidation plan. While that can temporarily lower your credit score, it will help you pay off your debts faster—and eventually help you improve your rating
Don’t Close Old Credit Card Accounts
Many people say that the best way to avoid debt is to cut up your credit cards. While this can certainly prevent unexpected shopping sprees, don’t cancel your credit account or close your bank account. That’s because the length or age of your credit history can help raise your credit score. Don’t use the card, but keep the account.
Create A Good Credit Mix
A credit mix actually accounts for a whopping 10% of your credit rating. This reflects how many different kinds of loans you successfully paid off. This can include student loans, credit cards, and car loans.
It’s a bit of a bind: you need to have a good credit score to get a loan, but you need to have had loans to get a good score. One workaround is to make short-term loans and pay them off. For example, an online merchant cash advance is usually very fast to process and does not require as many documents as other types of loans. You can apply for one, then successfully pay it off. Making this loan several times can actually improve your credit history, and eligibility for larger loans.
Get Online Merchant Cash Advances
A merchant cash advance can help entrepreneurs quickly raise cash for capital or for unexpected business expenses. This loan is good for businesses that allow customers to pay with credit cards, and in fact get most of their sales through credit transactions. Some examples are restaurants, retail stores, or online businesses.
In a merchant cash advance, you borrow against your future sales. It’s basically a cash advance—similar to a salary advance, but structured for businesses instead of individuals. Based on the size of your business and amount of your sales, you can borrow between $10,000 - $2 million. You just need to show proof of identity, four months of bank and credit card statements, and your business tax returns.
Merchant cash advance loans are a simple way for entrepreneurs to raise money for capital, monthly business expenses during a “slow season”, or for business expansion. You have the money you need, and then pay it off in affordable monthly installments.
Merchant cash advance loans don’t need capital or a high credit rating. It only takes a few days to process a merchant cash advance loan, so it’s a good option if you need to have the money right away.
Get business funding and make your dream come true
Don’t let a low credit score or a lack of collateral stop you from starting or growing your business. You have to start somewhere. Just flesh out your idea, work out a good business plan, and figure out how much money you need. Then, go look for business financing. You can find investors, take out a merchant cash advance loan, and work on raising your credit score. With these simple steps, you can get your business off the ground—and slowly grow it until you finally achieve your dream.