Nowadays the number of women entrepreneurs is on the rise. There are over 9.4 million women enterprises in the US responsible for $ 1.5 trillion in sales and employment for about 8 million people and their success is largely due to funding available from various sources. However, as happens often, some women enterprises face difficulties and the result is their credit score dips below average. When this happens then women find it difficult to obtain loans from regular channels and must turn to alternative lenders to borrow money, often at usurious rates of interest.

Women business owners with bad credit need not lose heart. There are business loans for bad credit available on better terms from various sources. One can get a reduced APR provided the business is running well and it is generating revenues. The main thing is the owner’s capability to stay solvent and repay the loan in time. Lenders also consider profitability. This means borrowers have to work to reduce expenses and manage their business to show increased profitability. The amount of debt is another factor. If a business is in debt then it indicates that the owner may find it difficult to repay and lending is always risky. However, if debts are low then it is a favorable factor. Terms vary from one lender to another so it is best to examine features of bad credit small business loans.

Important features to consider are the amount of loan available, collateral required, interest rate, documentation required, repayment schedule and time it takes for the lender to disburse the loan.

• Amount of loan: Depending on the applicant businesswoman and her plans, the amount available can range from $ 10000 to $ 200000 or even more. Smart women already operating a business but with bad credit will opt for just the right amount to help them in their expansion or to meet temporary needs of cash.

• Collateral: Regular lenders ask for collateral that women entrepreneurs may not always find convenient to furnish. It is better to pick alternative lenders who offer unsecured finance even though interest rate may be high.

• Interest rate: For borrowers with bad credit this is the biggest pitfall. Unless one chooses the right online lender, one can end up paying interest that could go as high as 100%, especially for unsecured finance. In such cases, it is best to try and find a lender offering lowest APR in the range of 20%. Interest charged depends on various factors such as debt, business health, and duration.

• Duration: It is best to select a lender offering flexible repayment schedule of up to three years. This is advisable should one opt for a larger amount. Though borrowers may end up paying more over three years by way of interest, their regular cash flow is not impacted and they can generate sufficient profits to pay principal and interest and still have cash left over.

• Documentation and Processing: Look for lenders who do not charge any processing fees and ask for minimum paperwork. All that should be necessary by way of paperwork is proof of identity, proof of residence, proof of ownership of business and bank statements.

• Time for disbursal: When money is needed quickly, it should be made available in 3 to 4 days and this is what reputed online lenders for bad credit businesswomen do—they disburse funds fast.

It is natural that bad credit businesses should have difficulties in processing credit card payments that further exacerbates their situation. In such cases, they can benefit by picking lenders who will assist with providing card processing terminals and merchant accounts at the least cost. 

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