Subprime Business Loans

Find the Best Options for Subprime Business Financing

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How Do You Get a Business Loan
with Subprime Credit?

If your personal credit history is holding you back from getting financed by traditional institutions, we’re here to be the bearers of good news—it doesn’t have to. Luckily, there exists a wide range of bad credit business loans you can take advantage of today. As the financial sector has spilled into the online world, the playing field has opened up for bad credit business loans to become more readily available to those who were previously not eligible for them due to credit issues. No doubt it’s easier if scores are great, but there are options to get bad credit business loans.

At AdvancePoint Capital, acquiring a working capital loans, no matter what level your personal FICO, is possible. By working with AdvancePoint Capital, you can enjoy the benefits of alternative lenders and poor credit business loan options at competitive interest rates.

Banks and credit unions do not typically provide bad credit business loans for small business owners because they have to protect their depositors when offering small business loans. So bank loans are out of the question if your looking for working capital loans with bad credit. That’s where AdvancePoint Capital comes in to play for a small business with bad credit.

We understand that running small businesses takes initiative, courage, and support. You may need cash for working capital, renovations, expansions — the list goes on. If one of those key elements is missing from your business, the structure can quickly fall apart. Having the opportunity to access a loan with bad credit for your business while struggling may be the very thing you need to catapult your company into the next income bracket. So, let’s dive into business loans for bad credit so that you can be better prepared for your small business loan application.

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AdvancePoint Capital makes the loan application process a simple, straightforward experience.

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What is a Subprime Business Loan?

A subprime business loan is a loan in which the business owners’ personal credit score and/or business credit score is impaired in a way that prevents them from getting approved for conventional loans. “Subprime” has a stigma attached to it due to the business borrower’s low credit score and its impact on business loan product availability and terms, like higher interest rates. The costs and terms of bad credit business loans are not as favorable as a traditional business loan for bad credit borrowers. 

Used properly, subprime loans play a vital role in providing businesses access to capital. Even business owners with poor credit scores need working capital. Without subprime loans, there would be no other options for this segment of business owners. Blocking all subprime borrowers from access to capital would diminish the diversity and overall existence of small businesses in general. It would also disrupt the balance of access to self-employment.

What is Subprime Credit? Credit Scores Explained

Subprime credit means your personal credit history is fair to poor. or more directly, bad credit. The term subprime is derived from “prime,” which means thriving, or best. “Sub” means below normal standard. Personal credit is not just a FICO score but an overall description of credit.

The Role of Business Credit in Subprime Loans

Business credit has an impact on business financing, that goes without saying. The good news is you can get business funding. If you have a defaulted business loan that is in collections or that you are currently in default on then that may block your ability to get a business loan.

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What Are the Most Common Uses for a
Subprime Business Loan?

Here’s a list of the top reasons that people need access to capital from Subprime loans.

  • Working Capital loan to improve cash flow
  • Inventory and/or Supplies
  • Marketing/Advertising
  • Equipment Purchases
  • Expansion
  • Renovations
  • Interior Decorating/ Remodeling
  • Emergency Repairs

How to Choose the Right Subprime Business Loan

The first step is to ask yourself why you need the money. What’s the purpose? How will it benefit your business? Will it help you strike the balance of finances your business needs to grow? The purpose and use will dictate what product you will choose. You need to balance costs and benefits because subprime credit lending costs more. The length of time of repayment, payment frequency, and product flexibility when making the best choice must also be considered. Lets check out the best business loans for bad credit.

4 Top Subprime Business Loans

Business Line of Credit

Business Line of Credit

Business line of credit is a revolving credit line which allows business owners to draw funds off of it like a credit card up to a credit limit. Great for working capital funds that are needed on the fly without having to contact a lender to access funds once in place.

Short-Term Business Loan for a California Small Business icon

Short Term Subprime Business Loans

A Short term business loan with bad credit where designed for the purpose of providing business funding for the credit impaired while reducing risk of the bad credit for the lender by shortning time to repay. Offers fixed rates, fixed terms, and fixed set payments.

Merchant Cash Advance for a California Small Business

Merchant Cash Advances

A merchant cash advance, also known as a purchase of future sales agreement, provides business owners with bad credit who can't get traditional small business loans with bad credit and alternative funding solution. Merchant cash advances are repaid by taking a fixed percentage of future credit card sales as repayment. Repayment is flexible and attached to future sales performance of the business, creating a lessor of burden on repayment. Great working capital solution.

Small Business Cash Advance for a California Small Business

Business Cash Advance

Similar to merchant cash advances, a business cash advance is also a purchase of future sales agreement but repayment is made by the funder taking a set percentage of all future sales deposits until paid back in full. Daily or weekly payments are required for this product. Great option for those businesses who can't get approved by traditional business loans and and may not accept credit cards from customers as a business model. Offers same day funding.

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Invoice Financing

Invoice factoring, also known as accounts receivable factoring or Invoice financing, is for businesses who invoice there clients on a regular basis with net 30 to net 60 terms and would like to get an advance on the invoice before the invoice is paid by the client. The credit of the business owner invoicing therefore is not relevant for invoice factoring.

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Equipment Financing

Generally, Equipment financing requires good credit, but new products have come out recently for certain types of equipment that allow for bad credit.

Where Do I Find Subprime Business Loans?

  • Online Lenders
  • Business Loan Brokers
  • Marketplace Business Lenders

Subprime Loans: Frequently Asked Questions

The fast, convenient, and straightforward way to get the money you need for your small business – now!

Get your quote today by filling out our simple form.

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The Bottom Line: Advice, Tips, Warnings About Subprime Loans

If you’re considering a bad credit business loan, you first must ask why. So, are you looking at these business loans because you were declined based on your personal credit history? Have you evaluated the cost vs. benefit analysis?

If the answer is yes to any of the above questions, we would recommend looking into asset-based business loans. If the answer is no, take the time to look at better business finance opportunities that offer better rates, costs, and terms.

Subprime Borrowers and Subprime Lenders: Predatory Lending

There are many important topics related to bad credit business loans, but predatory lenders are one of the most important to discuss. Not all subprime loans and lenders are equal. Unfortunately, some subprime lending institutions are founded on bad intentions.

Subprime borrowers tend to be preyed upon because of their bad credit ratings and high risk of default by online lenders. Worst of all, subprime loans usually have very high interest rates, which jack up the monthly payment. Borrowers might get a subprime loan from an unsavory lender to pay an installment loan they’re already struggling to pay. Installment loans tend to be car loans, student loans, mortgages, and more. They usually have a lower interest rate.

There is no set interest rate for a subprime loan. This applies to subprime mortgages and auto loans, not just business loans. Each lender gets to choose the interest rate themselves, which is why you need to be extremely careful when you shop around for a subprime loan with online lenders. Predatory subprime loans with high interest and unmanageable interest payments lock borrowers into debt. In short, this type of loan is, at best, unfair and, at worst, abusive on the part of the lenders.

Subprime Loan Risks

Although poor financial histories and credit scores usually lead borrowers to unfair subprime loans, this type of loan digs borrowers further and further into debt. If you end up with a loan like this, you’ll find that your monthly payment becomes outrageous. You’ll watch the balance in your bank account drop while your mortgage, auto loan, and any other type of loan you have, pile up.

Lenders may not always have your well-being in mind. Remember, offers that appear too good to be true probably are. At AdvancePoint Capital, we promise to be completely transparent and honest. It is our mission to help our customers achieve financial balance. We want the best for you, not the worst.

Signs of Predatory Lending to Look Out For

Two characteristics can identify a predatory subprime lender:

  1. Lenders who create loan terms that can’t be met within reason
  2. Lenders who seek borrowers who obviously can’t meet these unreasonable terms

Additional signs of predatory practices include:

  • Basic loan costs aren’t made clear to borrowers
  • Lenders have a lot of complaints and negative reviews
  • Lenders require electronic payment (this is actually illegal)
  • Lenders do not check credit scores before issuing borrowers a loan
  • Lenders offer an unreasonably high interest rate.

If lenders or banks exhibit these signs when you are looking for a loan, head for the door. These characteristics don’t just apply to subprime business loans but also subprime mortgages, auto loans, or any other type of loan you may need. Banks, money lenders, and mortgage lenders engage in these practices for malicious and self-serving reasons.

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What to Look For in Subprime Lenders:

People often wonder what they should be looking for in subprime lenders. Although the signs of bad lenders and banks are pretty clear, how can you be sure?

  • Talk to at least three different lenders and compare their terms and fees.
  • Pay attention to the prepayment terms. If this period and its fees seem too high, you may end up locked into the loan forever.
  • Reputable lenders don’t require upfront fees.
  • Lenders should never pressure you into borrowing more than you’re comfortable with, signing incomplete contracts, or overstating your income.

Whether you need a subprime mortgage, auto loan, small business loan, or some other loan, you have to shop around for the best rate loans. Avoiding predatory lenders will allow good people like you to live a financially stable life.

How to Get a Subprime Business Loan

Applying for a loan with AdvancePoint Capital is a simple 4-step process. Start with our online form, fill out the short application page, wait a few hours for your approval, and then get your money!

AdvancePoint Capital offers an easy business loan experience and countless resources to set you up for success. Our borrowers love the streamlined process, high approval rates, and flexible monthly payments that we offer. Unlike other banks and lenders, we offer the best deal in town.

If you need a subprime business loan with a low interest rate to achieve the financial balance that your business needs to thrive, call our excellent customer service team or fill out the online form to get your free quote today.

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