Several years ago a worked with a startup company who’s primary purpose was to help business owners buy web hosting services that fit their ecommerce needs. The holder embarked the business thinking he could get a business stream once he displayed positive cash flows, even however he had a bankruptcy several years before. He was wrong. Getting a business loan after bankruptcy is going to be difficult but not unlikely. There are steps to take that will mitigate the effects of the bankruptcy.
In the past bankruptcy just about ensured that lenders would not even consider providing you a business loan for at least Ten years. That is how long it takes for the bankruptcy to be liquidated from your credit report. Things have switched as times have switched and banks are more willing to lend money to companies that have had problems than in any time during the past.
Most of the time if the bankruptcy is a year or more in the past they will consider providing you a business loan based solely on what your company is doing at that time. Having the right credentials and other documentation to demonstrate your improved financial situation is very significant for this purpose. As an accomplished puny business consulting coach, I can assure you that documentation is everything to a bank.
You can expect that the interest rates will be very high on any loan you receive after bankruptcy. Your credit rating has been bruised and this harm will be reflected in the higher fees that you will be charged when you attempt to get a business loan after a bankruptcy.
It may even be a requirement that you get a co-signer in order to qualify for a business loan. They will more than likely require some sort of collateral in the form of a physical asset as extra surety for any loan you are attempting to get. This is what they have to do to protect themselves, since you have a bankruptcy in your record the lenders will be more skeptical about getting repaid and understandably so.
Before applying for a business loan after a bankruptcy you should check your credit report with the three major reporting agencies. Even tho’ the bankruptcy may have discharged the obligation it may still be listed on the report. Getting it expunged from the record is your responsibility. You can get the reports from Experian, Equifax and TransUnion online.
If you fail to get this done, the delinquencies will remain on your credit report and you will deal with these consequences every time you attempt to obtain/rebuild credit. Rebuilding your credit is significant, you may have to begin with a few secured credit cards.
It is a good idea to keep these bills low at very first so that you can pay them off in a timely manner. Higher balances will also lower your existing credit rating.
Any of the creditworthy bills you accumulate after this time will help to improve your credit scores if you maintain a good payment history. Credit agencies are only worried about whether you make the payments on time and whether you keep high balances.
Eventually when applying for the business loan after bankruptcy make sure you have a strong business plan, can response any reasonable objective and that you have a possible co-signer waiting if needed. Getting your credit back in good standing and receiving a business loan is possible after bankruptcy but you have to do the gam work.