Owning a business is a life-long dream for many. With your own business, you can create meaningful products and build relationships with your customers. That is something that you can not do when you are moving from job to job over the years. But if you have bad credit, you may feel that the dream of business ownership is one that you simply cannot achieve.
Fortunately, there are several financial options that can help you start a business even if you have bad credit. Here are a few to consider:
Bad Credit Mortgage
Many lenders specialize specifically in bad credit mortgages. These mortgages offer fair terms for those who have a spotty credit history, whether that means that they don’t have a long credit history or that they have a lot of delinquencies or other credit issues. Not only do these mortgages allow you to get the start up money you need, but they also give you affordable interest rates and other fair terms.
With a bad credit mortgage, you won’t be struggling to pay your business bills or expenses. You’ll be able to buy the equipment or inventory you want without falling behind even further on your finances. Of course, your business will give you the opportunity to pay off the rest faster than before.
Adjustable Rate Mortgage
Adjustable rate mortgages are typically available for those who have less than stellar credit. These mortgages start out at a lower rate, but the terms adjust periodically, and the interest rate may raise. Of course, the interest rate may also lower, depending on the market conditions and your own personal credit history.
Investors often use adjustable rate mortgages to take advantage of the lower interest rates to start. Then they sell the home before the loan readjusts and the interest rates raise. Those with bad credit can get an adjustable rate mortgage to start a business when they are not able to get other financing. They can spend time repairing their credit, and if the ARM adjusts to a higher rate, they can refinance with a more traditional mortgage product.
Maybe you bought your home when your credit was good, and you’ve experienced some problems since them. Now you want to own a business to get out of a tough financial situation. You may have trouble getting the financing you need because of your credit issues. However, with a second mortgage, you can leverage the equity in your home to get the business funding you need. Your credit won’t matter as much because the bank will look at the equity on your home as collateral. You’ll be able to get the cash you need to consolidate other business debts, pay for start up franchise costs or other expenses.
Bad credit can certain make things difficult when you are trying to get financing to start a business. Fortunately, there are several financing options that can help you own a business even if you have experienced some financial stumbles in the past. Talk to your lender about a bad credit, ARM or second mortgage if you need the money for running a new business.
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