Where To Get Bad Credit Small Business Loans: Options For Working Capital Loans

by: Neal Coxworth

Many small businesses have been hurt by the economic crisis of the last two years. For many retailers and small businesses, this has meant procrastinating vendor bills, tapping into savings or other strategies to try and make it until business conditions get better. While the best choice for any small business is always a commercial bank loan guaranteed by the SBA, the reality is that most businesses will not be approved for this sort of loan in today's difficult credit environment.

For these retail businesses, their main choice for bad credit small business loans was to get a merchant cash advance from their credit card payments processor. These cash advances are not true loans, but rather, cash advances based on future credit card receivables. Such advances are almost always characterized by factor (interest) rates as high 50%, high upfront fees, high hold-back (payment) rates, and the stipulation to switch credit card processors and/or pay for equipment.

Over time, these merchant cash advances can become a debilitating burden to businesses that use them, as they watch a large percentage of their daily sales volume go to paying back the advance and associated interest.

Now there is a much more cost effective way for businesses to obtain bad credit small business loans. This new type of business loan, called credit card receivable financing, is characterized by:

Rates that are 50-80% lower than a Merchant Cash advance

No Upfront charges.

No requirement to switch credit card processors

No stipulation to buy any equipment whatsoever.

A true business loan that builds positive credit for the future, unlike a cash advance

Owner credit scores as low as 550. Maximum loan of $500,000

Approvals in 48 hours, fundings in 7 to 10 days. Available in all 50 states.

In today's economic environment, small businesses need a way to obtain the capital they need without being taken unfair advantage of by cash advance companies looking to reap unfair profits. To find out more about one of the most cost effective way for merchants to get a bad credit small business loan, see below