Do you need a perfect credit score to get a small business loan?

No. A low credit score is a concern for some lenders, but banks aren’t the only lenders out there. In fact, it’s far from impossible to get a business loan with bad credit. Alternative and private lenders are often able to offer more flexible terms, including which level of creditworthiness they can approve.

Cheddar Capital’s Small Business Loans tend to base lending decisions on the financial realities of a business rather than the financial history of business owners. We take a close look at business performance, industry type, time in business and cash flow before handing out a loan.

Is the best way to obtain a loan for your business through a bank?

Not always. Entrepreneurs have more than one option for obtaining financing; banks are not the only game in town. There are alternative and private lenders, as well as creative types of lending like invoice factoring, which can help business owners shore up their capital without going through the lengthy and restrictive application process required by conventional lenders.

For business owners looking to borrow a relatively small sum (between $5,000 and $250,000), getting a bank loan is likely to be more trouble than it’s worth. Banks are more suitable for businesses that are interested in borrowing a large amount of cash and repaying the loan over a long period of time at a relatively low interest rate. Cheddar advises business owners to make sure they fall under those categories before applying.

Cheddar Capital often provide faster approvals for shorter loan repayment periods; sometimes businesses can obtain access to the funds in as little as seven days. Because the terms are more flexible, interest rates are often higher.