Small business loans for women with bad credit exist but some options can cause less harm to your credit history. For instance, before applying for start-up business loans for women with bad credit, you can apply for a line of a credit.
The line of a credit works like your credit card. Your lender defines a possible amount you can borrow. You can use these funds with withdrawal fees but you can’t exceed a possible limit. The substantial pro for women is affordability and possibility to apply with a credit less than 500. Still, you should expect high APRs (24-99%) in comparison to other options. The possible loan amount is usually as high as $150,000.
If your credit is higher than 500 but lower than 600, you can consider term loan or invoice factoring. These two possibilities are also a good option for women searching for business startup loans for women with bad credit. Invoice factoring loans are available for women dealing with invoice businesses (B2B) or government agencies (B2G). These loans provide financial assistance for selling and assigning invoices to a factor.
Firstly, a company receives 80% of the sum and when the invoice is paid, a company pays the other 20% of the value. The substantial con of this option is a high cost of borrowing. Still, if you are looking for small business loans for minority women with bad credit, it can work.