There is no doubt that acquiring a small business loan with bad credit has been an insurmountable obstacle for many small business owners. The lack of capital available to small business owners has been the single most important contributor to stunting the economic growth of small businesses. With the strict credit requirements in place today by most banks there was no reason to believe this situation would change. That was until the emergence of private firms like Shield Funding and their innovative merchant funding program that offer small business owners the opportunity to receive business loans with bad credit.
The main reason why Shield Funding has created this program for small business owners is because credit scores today are much more dynamic and cannot be the main reason for approving a business loan as traditional methods and most banking eligibility requirements suggest. In support of the Shield Funding way of approving loans based less on credit is a recent study by a major credit reporting agency. The study found that commercial credit scores were much more dynamic than personal credit scores as a result of the ebbs and flows of everyday business. This demonstrates how a business owner can see a slide in their personal credit score the more attached that score is to their business. This type of credit situation has become more common and it can be seen in the debt profiles of many small business owners today.
How Bad Credit Small Business Loans Work
Shield Funding is an experienced lender for almost a decade and understands that business owners often must use their personal credit to help manage the everyday expenses of the business. Understanding that credit scores are going to fall periodically for business owners is the first part of Shield Funding’s approval model. The second and more innovate aspect of the model is relying on the financial potential of a small business.
There are many great small businesses in the country that can do exceptionally well and experience tremendous growth with the right financial support. There are a variety of ways that help determine this potential for growth. Having experience with thousands of small business loans allows Shield Funding to know the type of impact having additional inventory or employees can be on a particular company. Examining the generated revenues over a period of time also allows underwriters to gather insight into growth possibilities. Finally, there are also intangibles such as recent reviews online or social media indicators that suggest how a business can grow with additional funding.
The point is that access to capital should not be determined by a piece of paper or an FICO score because it leaves out too much relevant data when processing a business loan application. It is only because of all the data that has been gathered over the years from small businesses that borrow money that Shield Funding is able to make these funding opportunities available. That and the technological advances of the internet have made small business loans with bad credit a reality.