“But I thought credit has no effect on receiving a small business loan.”

Often, small business owners will say that they thought credit has no effect on receiving a small business loan.  While credit has minimal effect in receiving funding from a merchant cash advance company, it still does play some part; however, it is far less strict than traditional bank loan programs.  An underwriter checks to see if the merchant has any major debt that he owes, and if he does, is he on some sort of payment plan?  Many times these are issues that the underwriter and the merchant are able to get around – and in rarer cases, the lender will have to pass up on the merchant’s business.

This type of small business loan is extremely risky on the lender’s behalf.  Lender’s are dealing with restaurants, retail businesses, and auto repair centers which have a high rate of defaulting to begin with.  Coupled with poor credit, it is surprising, that there are small businesses which lenders are still able to loan money to.

Before asking your lender this question ask yourself this: If I were a lender, would I lend to my business?

To read more about receiving a small business loan click here!