Being a business owner in a difficult industry can make it nearly impossible to fund your company through conventional means. Banks often will turn good companies away simply because of the fact that the industry the company works in is considered to be a “bad bet.” As a result, companies that have risky industries need to know everything possible to get the money they need. Here are some of our best tips for risky companies.
- Go for a merchant cash advance. The approval rates alone tend to be one of the main reasons why high-risk companies tend to like them so much. The fact is that it’s the easiest way to get fast business funding without having to resort to using your own personal credit card. As long as your company takes credit cards, you have a good chance at getting accepted.
- Be prepared for at least one rejection. Even merchant cash advance companies tend to be leery of certain high-risk industries, especially if the companies are relatively new. If you get a rejection, try not to take it personally. It can happen to even the best of companies.
- Shop around. Do not rely on one company alone for the funding that you need, even if they approve you. Since different lending forms will have different standards on risk, you might find that there may be a lender or a merchant group that will help you get the funding that you want without even labeling you a “high risk” client. Shopping around, in other words, helps you get the lowest rate and the highest chances of getting funded quickly.
- If you don’t have a good credit score, it may be best to skip banks altogether. Banks are not friendly with business owners that have a low credit score. Actually applying and getting rejected repeatedly can harm your personal credit score, too. In other words, it’s often an endeavor that will backfire.
The bottom line is that you should consider focusing your business funding search on alternative funding methods, and that you need to shop around. The sooner that you begin applying for advances, the sooner you can get the money.