Funding and startup, two words most entrepreneurs dread. It is hard enough to get a startup off the ground even if you have some funding ready to go. But obtaining more and keeping your new company going until it is ready to generate an ROI is quite a difficult feat. And things tend to get even more difficult if your credit history is not all that great.
So you want a fresh start and a new business but you are still dragging your past financial ailments behind, what can you do?
Join an incubator or an accelerator
Business incubators and accelerators are becoming more and more popular, and there is a good chance that you will find a vacancy at your local ones. Of course, you first need to decide which option suits you more. An incubator supports startups entering the beginning stages of building their company, while an accelerator advances the growth of existing companies with an idea and business model in place.
Depending on the stage of your startup you can opt for one or the other. You will get the space for your business along with the necessary help to grow. Of course, you still need certain funds, but these are substantially less than if you were doing everything on your own, to begin with.
Explore loan options
You might give up before you start just because you think your bad credit history rules you out as a candidate right away. But it doesn’t have to be so. Even if your local bank isn’t willing to provide you with the funds you need there are still other options to explore.
For example, you can find a reputable company that offers bad credit business loans and use this type of funding to get your business off the ground. Do your research and find a company that offers the best possible deal so that you can move forward with your entrepreneurial plans without letting your past credit issues affect your future.
If you think that the business idea you have can attract a lot of attention, this type of financing might just do the trick. With crowdfunding, it is more about creating a buzz around your product than actually pitching the idea. You need to be skilled in the use of social media so that you can promote your startup, get people interested in your product or service and inspire them to donate.
In this case, it is all about your story, a great origin story can help you generate some serious funds, and your bad credit history won’t play a role at all. Visit websites like Kickstarter and Indiegogo to see what your options are.
Just keep in mind that you need to stay transparent and deliver on what you promised your backers, otherwise you might end up with a bad online reputation and that is definitely not a good option for an emerging startup.
Last, but not least on our list is invoice factoring. This is a great option when you have already gotten your startup off the ground but you need the funds to keep it going strong. At the very beginning, there is a good chance that you will need the funds right away for a day to day expenses, and given your bad credit history, you might not be able to get those funds from the bank.
So in order to fix this issue, you can consider invoice factoring. This involves selling your unpaid invoices for a fee in order to receive the outstanding payments more quickly.
The benefit of such a source of funding is that it doesn’t require using your real estate as collateral, you can choose which invoices you want to include in the arrangement, and you can even enter into an ongoing arrangement with the factoring company. And your bad credit history has nothing to do with it.
So now you can breathe more easily. As you can see your bad credit history does not have to be an obstacle for getting your startup up and functioning. Everyone deserves that clean slate to start over and develop their business ideas, and by opting for one of the above-listed sources of funding for your business you will be getting just that and not letting your past take control of your future.
The only thing you need to ensure is that you don’t repeat the same mistakes that lead to the current bad credit history, and that you learn from them.