Have A Bad Credit? Here’s How You Can Still Get Working Capital
Maintaining cash flow is always good, but your cash will still be affected when a rare emergency occurs. This is when you need easy and quick access to working capital to take care of emergencies such as broken equipment or a need for multiple suppliers.
If you don’t have strong business or personal credit, it can be difficult to quickly secure a short-term loan or a line of credit. If you face regular problems of cash flows you need to reconsider your business setup and figure out the right path.
Here are some of the ways to avail working capital even if you have bad credit:
Ask Your Vendors About The Terms
Instead of focusing on how to raise cash flow immediately, focus on how to reduce the expenses. Having a spare month to pay all your bills can free up the cash. Paying vendors early will help in building a good credit score.
If in case your vendors don’t agree to the terms, they might accept payments in installments as per current balances. Although this is not a long-term option, it can help to free up some money.
Consider Multiple Options That Don’t Need High Credit Scores
The business funding market is Singapore is filled with many options that don’t require a high credit score. Before opting for any funding option, make sure to review the terms and conditions, fees and its requirements. Some of the funding options that don’t necessarily require a high credit score are as follows:
Line of Credit
A line of credit, one of the very popular types of working capital, includes a business credit line, a business credit card, line of credit or a personal credit card. Although credit cards are a popular way to deal with daily expenses, they usually have higher interest rates.
Factoring allows you to receive cash for the pending invoices. Factoring companies in Singapore offer flexible terms allowing the business owners to select the invoices that need to be factored.
Online Business Loans
Many online lenders offer business finance by considering the performance of your business instead of considering credit history. Although the interest rate for such funding option will be on the higher side, there will be a good alternative for businesses to keep going.
Microlending is another funding option which has no credit score requirement. Business funding companies provide microloans on the basis of the accomplishments of your business and as per the owner’s market experience rather than his business or personal credit score.
Merchant Cash Advance
Merchant cash advance option can be availed by businesses even if their credit score is poor. A merchant cash advance is a loan that businesses can repay with a part of the business’s debit and credit card sales or auto deduction from your bank.