May 19, 2020

Bad credit? Learn how to still run a successful business

finance
Leadership
Technology
bad credit
Tristan Anwyn
4 min
Bad credit? Learn how to still run a successful business

If you currently suffer from bad credit, then you may be worried that you won’t be able to run a successful business. However, your dream can still come true—you can have your own company, despite a low credit score.

Originally reported by our sister brand, Business Review Canada, many believe that one of the consequences to having bad credit is the inability to become an executive in the business.

RELATED TOPIC: 4 key ways establishing credit insurance mitigates risk

Sure, you may face some challenges or roadblocks along the way (i.e. getting the proper funding to initially start your business), but bad credit doesn’t have to completely hinder your dreams of starting your own company.

The following tips can help you get your company up and running—take a look!

Look beyond banks

As the article, "Just Exactly What Is Bad Credit?" points out your credit score is used to assess how much of a risk you are to loan money to.

If you're showing unpaid debts or skipped payments, that won't inspire confidence in a big lender such as a bank.

But it’s interesting (and vital) to know that banks are not your only choice when it comes to borrowing large amounts of money.

Online lenders have risen in popularity in recent years, and can be a viable alternative if you don't have the best credit score. Online lenders are more willing to take risks.

Do be aware that online lenders often charge higher interest rates than banks, and are not as strictly regulated. That's why you should always read the fine print in detail, and look to reviews, ratings and personal recommendations when making a choice.

Micro lending is also an option for those with poor credit.

Micro lenders such as ACCION, Grameen Bank and Kiva provide small loans (typically around $1,000- $5,000, though amounts may vary). Micro lenders look beyond your credit score, taking into account your passion, experience, and the viability of your idea.

Consider crowd funding or peer to peer lending

Crows funding is also an option that you may want to consider pursuing.

Crowd funding sites allow you to raise money by letting people know how brilliant your idea is and getting them excited about it. The more effectively you can market your idea, and your crowd funding page, the more likely you are to succeed.

Peer-to-peer lending removes the financial institution; allowing investors to lend directly to businesses.

Whether you are a candidate for peer to peer lending will depend on just how bad your credit score is, as it may still be taken into account. However, with typically lower rates and more flexibility than blanks, peer to peer lending is worth investigating.

Investigate grants

Lending isn't the only way to finance a business.

You can also look into the possibility of grants. Be wary of websites that promise to find you Government funding - getting a grant is by no means an easy route, so be wary of any company that makes it sound simple.

Be prepared to do a lot of research into what is available both for your type of business and in your geographical area.

Grants are strictly administered, but depending on where you live you might find grants available for healthcare companies, technology (especially green technology), tourism businesses, or retail in poor areas.

Clean up your credit score

If you want to help your business financially in the future, do all you can now to clean up your credit score:

  • Pay off those credit card balances if you can;
  • Be mindful of the ratio of what you put on your credit card compared to what you pay off monthly;
  • Try to consolidate credit card usage into one or two go-to cards rather than using lots of cards;
  • Pay bills and balances on time;
  • Make sure you see a copy of your credit report and query any charge or debts you feel are unfair.

Getting capital for your business can be challenging when you have credit problems, but bad credit doesn't have to spell disaster.

Remember: Even with bad credit, you can still get funding to start a business—you just have to get creative. Think outside the box. Just remember to always read the fine print of the contract and to never borrow more than what you will be able to pay back.

RELATED TOPIC: 3 ways your business can improve its cloud safety

About the Author: Tristan Anwyn is an author who writes on a range of topics including social media, SEO that works, and how to find funding for your business.

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Jun 8, 2021

Timeline: India takes unicorn leap with six in five days

India
Unicorns
Startups
tech
Kate Birch
2 min
We chart an historic week in India’s startup tech industry, where from April 5-9 the country achieved six unicorns

We chart an historic week in India’s tech industry, where in just five days, between 5-9 April 2021, the country achieved six new unicorns, bringing India’s total to 10 in 2021 to date, an immense unicorn leap from just seven in 2020 and six in 2019.

April 5: Meesho

India’s first social commerce unicorn, Meesho raised US$300m from SoftBank, Facebook and Shunwei Capital, giving the Bangalore-based startup a US$2.1bn valuation, a threefold jump from its previous funding round in 2019. Founded in 2015 by two IIT-Delhi graduates, Meesho connects producers and resellers, helping small businesses sell through social media. It has 45m customers and has enabled 13m entrepreneurs to start their online businesses with no investment.

April 6: CRED

Founded just over two years ago, Bangalore-based credit card repayment app CRED raised US$215m from Falcon Edge Capital and Coatue, nearly trebling its valuation to US$2.2bn from its January US$80m round. Allowing customers to pay off their credit card debt while earning CRED coins which they cash in for rewards, CRED has grown rapidly during COVID-19, doubling its customer base to nearly 6 million in a year.

April 7: API Holdings / Groww

The first epharmacy startup to gain unicorn status, PharmEasy (API Holdings), which has digitised 60,000 brick and mortar pharmacies and 400 doctors across India, raised US$350m in a round led by Prosus Ventures. Founded by four former Flipkart employees as a way of making investing simple, investment platform Groww became India’s second-youngest fintech unicorn, raising US$83m in Series D funding led by Tiger Global, quadrupling its previous round in September.

April 8: ShareChat

New Delhi-grown social media startup ShareChat, founded in 2016 by Mohalla Tech raised US$502m from Lightspeed Ventures, Tiger Global, Twitter and Snap taking its raised total over six rounds to US$766m and pushing its valuation to US$2.1bn. The funding will be used to grow its user base and short video platform Moj, which launched in 2020 following TikTok’s ban in India. The regional language startup claims 280m users.

April 9: Gupshup

AI-led conversational message startup joined the unicorn club after raising US$100m from Tiger Global giving it a ten-fold valuation of US$1.4bn. The smart messaging platform, which has seen accelerated growth during the pandemic, was founded in Bangalore in 2005 by serial entrepreneur Beerud Sheth, whose online freelancing platform Elance is now listed. Gupshup’s API enables 100,000+ businesses to build messaging and conversation experiences across 30+ communication channels. 

 

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