Every business owner should want to have good business credit. But sometimes that just isn’t the case. Bad credit can limit the options that a company may have to get business financing. But the good news is that there are ways to secure financing and open a business account, even if the business has less than stellar credit.
What Can Happen if Your Business Has Bad Credit
Having bad credit can:
- Cause an increase in your insurance premiums.
- Limit the number and quality of vendors and suppliers.
- Cause issues with real estate and utility companies.
- Harm business relationships if credit problems cause delivery time delays, payment delays, or paycheck delays.
- Negatively impact the operational efficiency of the business.
- Restrict the business’ ability to adapt and grow, including getting the necessary business account funding that may be needed.
How to Open a Business Account When You Have Bad Credit
First, if you have bad personal credit, you can form an LLC or corporation as a separate legal entity. Then use that entity to open a business account for the entity.
Second, form and build a strong relationship with a bank, credit union, or alternative lender to help you set up a business account to achieve the financing that you will need.
Third, get a copy of your ChexSystems report to see why you may have been turned down for a business account. Look for any errors and if you find them, dispute them. Identify areas that need improvement and fix them. Clear up any debts or fees that look troublesome.
To secure business account financing with bad credit, you can pledge a down payment, provide collateral, sign a personal guarantee, or accept a smaller loan amount.
Seek financing from loan specialists and alternative lenders who offer better opportunities to provide financing approval.
Seek Expert Financing Assistance
Contact Critical Capital Solutions, based in Lancaster, PA for customized tailored financial solutions. We provide a wide selection of financial products so you can get the capital you need.