Dealing With Your Own Bad Credit

Getting business loans with bad credit is challenging. Not impossible. Just challenging. The biggest thing to remember is that your credit is but one component of your whole review. It is an important component, but not the only component.

Suppose, for example, that the president of a construction company was forced into a bad credit rating due to the financial collapse the past few years. Would that totally prevent him from getting construction loans in the future? His whole life? If that were the case, his whole career would be over. Right now, with no questions asked. But it doesn't have to be like that.

If I were that contractor, I would put together three things:

1. A portfolio of my successes. Put this into a binder of some sort, something that the bank lender can keep in his records. And label it prominently as "Success of My Construction Business".

2. A very strong advisory board. Putting together an advisory board says that you are willing to listen to some of the best minds in the business AND that those people are willing to advise you. That is a pretty strong combination. It doesn't ensure success, but it sure goes a long way in that direction.

3. An exceptionally strong business plan. I would start with a basic business plan and build a business plan that set my company apart from all the others.

There is no sense in trying to hide the bad credit. But do demonstrate how you have learned from that experience, and how you can get your business back on track.

Thousands of entrepreneurs will be in the exact position soon, if they aren't already. The banking industry has a choice. It can stick with its old definition of "good credit", or it can revise it to meet the reality of business life. By sticking with the old definition, they are eliminating a whole generation of very strong entrepreneurs, and they know that. They will have to revise their rules if they plan on lending to strong prospects.

So, with my portfolio and my business plan in hand, I would walk in with confidence. I think I would even put my Advisory Board members right up front in my business plan.

Where your past is strong, your future will be too. Just get yourself over the present and you will be fine.


MaryAnn Shank's career has focused on helping businesses get operational and get financed.  Her business plan ebooks have helped literally thousands of entrepreneurs.  The newest series she has sponsored -- the Start Up...

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