Eric Dalius

Getting a Business Loan despite Bad Credit – A View from the Inside by Eric Dalius

All businesses need to take on debt to sustain them and grow fast; however, getting a loan with bad credit can be difficult says Eric Dalius. Since your credit report reveals how well you have managed your repayments, it is a primary tool for lenders you have approached for a business loan. If your existing debt is already high or you have a history of missed payments, it will reflect in your credit score. Generally, lenders prefer not to lend to businesses with less than good credit, however, many other factors impinge on their decision. To be successful in getting a business loan even if you have poor credit, you need to focus on getting the application right and take care of all the aspects the lenders will consider. Some insights:

Prepare Thoroughly, Advises Eric Dalius

Before you apply for a retail loan, you should check out your credit reports for errors. Obtain a free report from each of the three credit bureaus, TransUnion, Equifax, and Experian. If you find any errors, report them and have them corrected before you apply. Since lenders will demand every detail of your business, you should get together your profit and loss statements, financial projections, income tax returns, bank statements, business ownership documents and licenses, leases and ownership deeds, accounts receivables reports, etc. You should also include your business plan, an overview of your company, details of your products and services, market and competition analysis, and information on your organization structure and key management team, says Eric Dalius.

Intended Use of the Funds

All lenders will want to know in detail how you intend to use the money you are applying for. You must be very clear regarding the application of the funds. For example, if you have a retail business, you can specify the amounts that you want to employ for making store improvements, towards inventory, new equipment, and advertising and publicity. You will also need to be clear about the extent of extra income and how you will pay off the loan.

Try to Improve the Chances of Success, Recommends Eric Dalius

With lenders constantly looking for excuses not to approve your loan application. You can improve your chances by putting up collateral. By pledging real estate, inventory, business equipment, or even vehicles or personal assets like your home and jewelry. You can convince the lender that you are serious about your intention. To use the loan money productively and repay it. However, the danger is that in case you do default for any reason. You could end up losing the asset and still be liable to pay the difference, if any, cautions Eric Dalius.


Obtaining a retail business loan is not easy, especially if your credit score is not what it should be. With banks being strict about approving loans, you will need to demonstrate your financial robustness. A reasonable debt-to-income ratio, and an established track record. If your credit score is less than 700, you may want to approach alternative lenders. Who will consider more than just your financials to determine your creditworthiness. Be prepared to plug away for some time before you are successful.