Startup Business Loans for Bad Credit: Guaranteed Solutions in the UK

Have you been turned down for a loan due to a poor credit rating? You are not alone. Many startups and enterprises struggle to qualify for a loan. It affects the growth rate and the potential to capitalise on the opportunity. Yes, facing rejection due to previous financial mistakes is not fair. Therefore, startup business loans for bad credit offer hope. It helps you get instant access to cash regardless of your bad credit history. You can get one at favourable rates with consistent revenue and operations.

What do you mean by bad credit business loans?

Bad credit business loans are a financial facility for companies with pending payments, CCJS, bankruptcy, and other issues. It is for individual businesses struggling to qualify with mainstream loan providers. You may get unsecured and secured bad credit business loans for your needs. The amount you get depends on the purpose, yearly revenue, credit score, and current payments. However, the interest rates remain slightly competitive on such loans.

What are the pros and cons of startup business loans for bad credit?

Yes, just like any other loan, these bad credit business loans have pros and cons. Analysing these will help you decide what's right for your finances. Let’s check:

What aspects may help you get guaranteed approval on startup business loans with bad credit?

Guaranteed approval on business loans does not guarantee immediate loan sanction, regardless of the credit issues. Instead, it is a careful and credit-friendly examination of your affordability, given the debts and liabilities. No responsible direct lender can provide instant approval without a basic check.

However, you may get startup business loans for bad credit guaranteed in the UK if you meet the basic eligibility criteria. It includes consistent business operations, a well-futuristic business plan, and balanced payments. They also consider your recently improved financial status. If you have been making timely payments, you may qualify. It helps you achieve your business goals timely manner. However, just make sure that you get the best interest given the financial circumstances. Explore the business loan quotes and fetch the one that meets your requirements. Here are other aspects that may help you get a startup loan with bad credit, with guaranteed approval:

1) Getting a personal guarantee

Providing a personal guarantee grants your business strength and credibility against the borrower. It helps the loan provider get reassurance of your repayment capability. A personal guarantee could be in the form of a person, your business, or personal assets. The person can be your business partner. He will be liable to repay the dues if you alone cannot.

Alternatively, if the business assets do not seem sufficient to meet the dues, the loan provider may tap personal assets. Yes, if you provide one, the person may claim it in the event of loan default or non-repayment.

2) Get a loan against a business asset

It is one of the best ways to increase the chances of a business loan approval with a bad credit score. You can provide an asset that is worth more than the amount you need. It is ideal for business owners with sufficient assets but a low credit rating. You can provide one of your verified assets to get funds against. The loan provider analyses it and provides the amount according to the LTV.

The loan-to-value ratio reveals the value of the asset against the amount you need and the time period. If the asset holds much value after the loan term ends, you may get a high amount for your needs. You may also get affordable terms and interest by providing the asset as security. However, make sure to repay the dues timely manner to claim your asset back.

3) Prepare a well-designed business plan

A business plan lists the strategies that your business is likely to accomplish by a certain time or years. It reveals how your business will grow according to the available capital and profit statements. Individual businesses lacking a sound credit score need to work hard. They must try to strengthen other aspects to attract good funds for their needs. Thus, analyse and update your business plan to attract business loan providers.

If your business plan shares the potential to achieve the decided goals, you may get the loan. It must list the strategies you will use, the team, the business mission, and how your current and future strategies align with them. You must be transparent about financial numbers here. It generates reliability and helps you get the loan instantly. Update the executive summary, team, marketing strategies, sales strategies, operations, and funding.

4) Pay some bills to improve your credit

The less risk you pose to the direct lender, the higher your chances you share of qualifying for the loan. The major risk appears in the form of the debts that you have. Individual businesses with heavy debts, like renovation loans, car loans, credit cards, or rent, struggle to qualify. If seeking a solution to manage these debts better, consolidate the payments.

You can get a debt consolidation loan with no guarantor requirement on an online marketplace. Identify the heavy and unmanageable debts.  Merge these into a single payment per month. It reduces your monthly payment amount and interest and optimises your credit score. This positive event in your credit report helps you qualify for the loan immediately. You may even fetch better interest rates.   

5) Ensure a satisfactory business revenue

According to Iwoca.com, “a company must earn at least £500/month to qualify for a business loan.” Every individual business owner must work towards earning at least a specific amount every month.  It is about ensuring regular or monthly payments as a business owner. It is because you must pay instalments monthly to cover the loan payments.

If you struggle to earn some amount, it may hamper your approval chances. Identify ways to ensure regular business. For example, you can run campaigns to promote your best-selling products. Check and invest in re-marketing programs and referral programs to market and boost sales.

6) Contact an affordable direct lender

If you want to avoid paying the brokerage fee and additional costs, then a direct lender may be a good choice. Here, you can directly deal with the loan providing person. You don’t have to go via a mediator or middleman. It helps you save money and time. An expert direct lender may help you with your financial needs by displaying expertise.

He analyses your finances, loan purpose, and the amount needed. Accordingly, he may help you get the best quotes for a bad credit business loan. He may also help you understand the aspects that may help you save money on interest while getting a loan with bad credit. It thus makes it easier for you to follow the process and get a loan.

Bottom line

These are some solutions to get a startup loan for bad credit with guaranteed approval in the UK. You may check your credit report and pay some debts. Analyse the business plan and update it according to the latest business trends and company goals.

Check and compare the business loan options by seeking pre-approval. It helps you know the amount you may get approximately and the loan costs. It does not affect your credit rating. Apply with a guarantor, collateral, or a good business plan to get guaranteed loan approval.