If you have a bankruptcy on your record, you might wonder if it is possible to apply for a loan. The bankruptcy is one of the main reasons why small businesses are denied loans. You might be hesitant to apply for a loan. Even though it might seem difficult to obtain funding following a financial setback, small business loans are still available after bankruptcy. Look for alternative lenders.
How to improve your chances of approval
If you have been bankrupted in the past, it may be difficult to get small business financing. Do not let your past financial mistakes affect the future of you business. You can improve your chances of being approved for a small-business loan despite a bankruptcy. You can follow these steps:
Improve your Credit
You should fix your credit rating after a financial crisis. You can repair your credit by using loans for bad credit . To improve your score, you can make up for late payments or pay off other debt. You will feel more secure and achieve your long-term financial objectives if you increase your credit score.
Get A Cosigner
If your credit is not perfect, lenders may ask for a cosigner to guarantee repayment of the loan if you are unable. This person will pay the loan back if, for example, you have financial difficulties or default. Find a cosigner who has a good credit score. This will increase your chances of receiving a loan following bankruptcy.
Put money down
Most large lenders will require that business owners make a downpayment before they can get a loan. You may find it strange to have to pay cash to withdraw money. Not all lenders ask business owners to pay a deposit. Alternative lenders, for example, don’t usually ask you to pay a deposit.
Maintain a steady cash flow
You may have to show that you are able to pay back the loan. Lenders will often only work with companies that can repay their loans. They know they will get their money on time and fully.
Alternative Lenders Can Help You Get a Business Loan if you’ve Filed for Bankruptcy
After a bankruptcy, the time factor is very important. Your chances of getting a business loan after a bankruptcy are lower if the incident happened recently than if it occurred years ago. Alternative lenders will still qualify applicants whose bankruptcy was two or three years old. These lenders make it much easier to obtain a loan than a bank. Traditionally, traditional lenders require that a longer bankruptcy period has passed.
Alternative lenders do not punish you for the past. Instead, they focus on your current cash flow. This can be verified by bank statements. We will do everything we can to get you a loan, even if your credit history includes a bankruptcy. Fast cash and a quick application will boost your business’s credit score. Contact us today to request a working capital credit.
