Posts Tagged ‘Alternative Finance’

What’s the Difference Between Poor and Bad Credit in 2023

July 26, 2023

When you’re seeking to secure a business loan, understanding your credit score becomes a critical factor. This numerical value represents a person’s creditworthiness, and lenders use it to determine the likelihood of a borrower repaying their debts. At JPM Capital, our mission is to ensure you understand the distinction between poor and bad credit and how it can influence your funding solutions.

A meter showing poor credit, representing the exploration of credit ratings.

What’s the Difference Between Poor and Bad Credit?

While the terms “poor” and “bad” credit might seem interchangeable, there’s a difference. As per UK credit agencies, a score below 561 is categorised as poor, while a score below 509 is termed bad.

  1. Poor Credit: Poor credit arises when your credit score is below the average due to factors such as missed repayments or maxed-out credit cards. If you fall into this category, Bad Credit Business Loans can be your saviour.
  2. Bad Credit: This means your score is significantly lower than the average due to severe issues like bankruptcies or County Court Judgments (CCJs). Securing loans with bad credit can be challenging, but not impossible, especially with alternative finance options.

Did You Know? More than 30% of the UK’s adult population has poor or bad credit, making it difficult for them to secure traditional loans, as per this Business Credit Score guide.

The Three Types of Bad Credit

There are three primary types of bad credit:

  1. Late Payments: This is the most common and can significantly impact your credit score. As this SME loans guide suggests, even one missed payment can cause a drop.
  2. Defaults: A default occurs if you fail to pay a debt after multiple reminders. It can severely harm your credit rating.
  3. CCJs (County Court Judgments): This is a court order in England, Wales, and Northern Ireland registered against you if you fail to repay a debt.

Each type of bad credit remains on your credit file for six years, which is why it’s essential to make repayments on time and maintain a healthy credit score.

How Credit Scores Affect Business Loans

A low credit score can make securing small business loans more challenging, as lenders often view lower scores as higher risks. However, JPM Capital believes in providing equal opportunities. With solutions like VAT funding, tax funding, and working capital funding, we assist businesses in reaching their goals, irrespective of their credit history.

Pro Tip: Diversify your funding solutions to enhance your chances of securing a loan, even with a poor or bad credit score.

Refurbishment and Expansion Funding

Even with poor or bad credit, you can secure funding for refurbishment or expansion. These funds allow businesses to invest in growth, irrespective of their credit history.

Conclusion

Grasping the nature of your credit score and the difference between poor and bad credit can be a game-changer for your financial journey. It might seem daunting to apply for business loans with an imperfect credit score, but with the right options and partners, like JPM Capital, your business can secure the necessary funds.

FAQs

Q1: What is the difference between poor and bad credit?

A1: In the UK, a credit score below 561 is considered poor, while a score below 509 is classified as bad.

Q2: What is considered poor credit?

A2: A credit score falling below the average score of 561 is categorised as poor credit.

Q3: What is classed as bad credit in the UK?

A3: A score below 509 is termed as bad credit in the UK.

Q4: What are the three types of bad credit?

A4: The three types of bad credit are late payments, defaults, and County Court Judgments (CCJs).

Useful External Resources

For more insights about business loans and managing bad credit, you can explore these informative resources:

What Credit Score Do I Need for an Unsecured Loan?

July 18, 2023

In the world of finance, credit scores play a crucial role, especially when it comes to unsecured loans. But, what credit score do you need for an unsecured loan? This is a question we often get asked at JPM Capital.

An individual working at a desk, symbolizing the diligent research needed to understand the credit score requirements for an unsecured loan.

Before we delve into the specifics, let’s define what an unsecured loan is. These are loans that are not secured against any of your assets like property or vehicles. Given this lack of security for lenders, your creditworthiness—usually indicated by your credit score—becomes a significant factor in your approval process.

Understanding Credit Scores

The credit score ranges from 0 to 700 in the UK, with any score above 380 considered as ‘fair’. Most lenders consider a score of 420 and above as ‘good’, while anything above 465 is ‘excellent’. To secure an unsecured loan, it’s ideal to have a ‘good’ credit score, however, having a lower score doesn’t make it impossible to get a loan.

Different lenders have different policies; for example, bad credit business loans could be an option for business owners with a lower credit score. It’s worth exploring alternative finance options if traditional channels are closed due to credit issues.

Note: The lowest credit score to get a loan varies across lenders. However, anything below 380 could pose a challenge. But, it’s not impossible.

Considerations for Unsecured Loans

Are unsecured loans hard to get? The answer depends on various factors. For businesses looking for working capital funding or refurbishment/expansion funding, having a good credit score can ease the process.

Lenders will evaluate your business’s financial health, trading history, and repayment capability. They also look at industry-specific risks and external factors, such as market trends and economic conditions.

One example is CryoBurst, a company offering whole-body cryotherapy and sports massage services. Their testimonials showcase a strong market presence and customer satisfaction, factors that would likely be considered favourably by lenders.

Finding the Right Loan

Even with less-than-perfect credit, there are many ways to secure funding. For businesses struggling with tax payments, tax funding and VAT funding are also viable options. Small businesses might also consider small business loans. It’s essential to explore all options and find the right funding solution for your needs.

Conclusion

Getting an unsecured loan doesn’t always hinge on having an ‘excellent’ credit score. Lenders consider many factors when evaluating a loan application. At JPM Capital, we provide a range of funding solutions and strive to cater to different needs. With our guidance, you can navigate the financial landscape and find the most suitable options for your needs.

Frequently Asked Questions

  1. What credit score do you need for an unsecured loan?

While the ‘good’ range (420 and above) is ideal, it’s possible to secure a loan with a lower credit score. Consider exploring alternative financing options if your credit score is less than perfect.

  1. What is the lowest credit score to get a loan?

A score below 380 could make securing a loan challenging. However, different lenders have different policies, and options like bad credit business loans exist.

  1. Do you need good credit for an unsecured loan?

Having a good credit score can make the process easier but isn’t always necessary. Lenders consider many factors, including business health and trading history.

  1. Are unsecured loans hard to get?

Securing an unsecured loan can be challenging without a good credit score or a strong financial standing. However, with the right guidance and alternative funding options, it’s achievable.

For more information, visit our blog or contact us directly.

Same Day Business Loans: A Lifeline for Your Business

July 4, 2023

Running a business is a test of resilience and adaptability, especially when it comes to finances. For businesses in the UK, urgent funding needs can arise anytime, be it for growth, unexpected expenses, or cash flow issues. This is where same day business loans come into play.

Infographic detailing the eligibility requirements for same-day business loans.

 

Why Businesses Need Fast Funding

Let’s face it. Even the most meticulously planned budgets can go awry due to unexpected circumstances. According to a survey, nearly 50% of UK small businesses face financial hurdles every year. Consequently, there’s an increasing demand for fast and reliable financial solutions.

“Money, it turned out, was exactly like sex, you thought of nothing else if you didn’t have it and thought of other things if you did.” — James Baldwin

How Fast Can You Get a Business Loan?

Traditionally, getting a business loan could take weeks or even months. However, at JPM Capital, we understand the urgency, and our streamlined application process ensures you receive funding on the same day.

For instance, our bad credit business loans are designed for businesses facing credit challenges. Our other services such as VAT funding or Tax funding can also be secured swiftly, offering a financial lifeline when most needed.

What is the Easiest and Quickest Loan to Get?

While it depends on your specific circumstances, our small business loans are among the easiest and quickest to get. With minimal paperwork and flexible eligibility criteria, they serve as the ideal solution for SMEs in need of urgent funding.

Alternatively, alternative finance solutions like invoice financing or merchant cash advances can provide funding in as little as 24 hours. These are particularly beneficial for businesses with strong sales but struggling with cash flow.

Which Loan Company is Easiest to Get?

At JPM Capital, our philosophy is to offer straightforward and swift funding solutions. We focus on your business potential, not just credit scores. So whether you need working capital funding or refurbishment/expansion funding, our team is ready to assist.

“Success usually comes to those who are too busy to be looking for it.” — Henry David Thoreau

Eligibility Requirements for Same-day Business Loans

Same-day business loans provide rapid access to funds, but they do come with specific eligibility requirements. Here’s what you typically need to qualify:

  • Business Age: Most lenders, including JPM Capital, require your business to have been operating for at least six months.
  • Monthly Revenue: Your business should have a minimum monthly revenue—some lenders stipulate at least $15,000 in monthly bank deposits.
  • Credit Score: Certain lenders require a minimum personal credit score of 500 to qualify for small business loans. Remember, though, that bad credit business loans are also available.
  • Annual Revenue: Some lenders ask for at least $100,000 in annual revenue.
  • Other Requirements: Additional documents, such as tax returns, bank statements, and business plans, may also be required.

Please note that eligibility requirements may vary depending on the lender and the type of loan. It’s best to check directly with the lender for their specific eligibility requirements.

Infographic illustrating the impact of credit score on same-day business loan interest rates.

For instance, companies such as Shield Funding offer same-day business loans with interest rates as low as 5-15%. Even their bad credit business loans start at 12% interest. However, interest rates for such loans can range from 25.00% and upward, depending on the lender and the borrower’s credit risk.

Remember, other factors like cash flow and revenue can also influence your loan’s interest rate. Therefore, it’s essential to compare interest rates and fees from different lenders to choose the best loan for your business needs, especially if you have a lower credit score.

Impact of Credit Score on Same-Day Business Loans Interest Rate

Your credit score can significantly influence the interest rate for same-day business loans. Generally, borrowers with higher credit scores qualify for lower interest rates. Conversely, borrowers with lower scores may face higher interest rates and fees.

For instance, companies such as Shield Funding offer same-day business loans with interest rates as low as 5-15%. Even their bad credit business loans start at 12% interest. However, interest rates for such loans can range from 25.00% and upward, depending on the lender and the borrower’s credit risk.

Remember, other factors like cash flow and revenue can also influence your loan’s interest rate. Therefore, it’s essential to compare interest rates and fees from different lenders to choose the best loan for your business needs, especially if you have a lower credit score.

Lenders Offering Same-Day Business Loans with Lower Interest Rates

Yes, some lenders provide same-day business loans with lower interest rates for borrowers boasting good credit scores. Here are a few:

  • BlueVine: They offer a line of credit with interest rates as low as 4.8% for borrowers with good credit scores.
  • Fundbox: Fundbox’s line of credit starts at 4.66% for borrowers with good credit scores.
  • OnDeck: OnDeck’s line of credit starts at 13.99% for borrowers with good credit scores.
  • Shield Funding: Shield Funding offers same-day business loans with interest rates as low as 5-15% for borrowers with good credit scores.

Remember, these rates can vary depending on the lender, loan type, and your creditworthiness. Hence, it’s crucial to compare rates and fees from various lenders to secure the best loan for your business needs.

Conclusion

In a world where time is money, same-day business loans offer a crucial lifeline for businesses in need. JPM Capital is committed to providing fast, efficient, and tailor-made funding solutions to ensure your business doesn’t miss out on opportunities due to financial constraints. To know more about how we can assist your business growth, get in touch with us here.

FAQs

Can you get a business loan straight away? Yes, at JPM Capital, you can receive a business loan on the same day of application.

How fast can you receive a business loan? You can receive a business loan as fast as the same day of application with our streamlined process.

What is the easiest and quickest loan to get? Our small business loans are typically the quickest and easiest to get, with minimal paperwork and eligibility criteria.

Which loan company is the easiest to get a loan from? JPM Capital prides itself on offering straightforward and quick loan approvals, making us one of the easiest companies to secure funding from.

For more financial insights and solutions, don’t forget to visit our blog and stay updated with the latest trends in business financing.

How to Get a Business Loan: Your Guide to Funding Solutions

July 3, 2023
Starting a business or seeking to grow an existing one often necessitates additional funding. Whether it’s for hiring new talent, purchasing essential equipment, expanding your operation, or even just smoothing out cash flow, getting a business loan in the UK can be an invaluable lifeline. However, you might be asking yourself: “Is it hard to get a business loan in the UK?” In this article, we will guide you through the process, options, and potential challenges, with a focus on JPM Capital’s wide range of funding solutions.

Is it Hard to Get a Business Loan in the UK?

While obtaining a business loan in the UK can seem daunting, the process has been significantly streamlined thanks to alternative finance options. In the past, traditional banks were the go-to for small business funding, but their strict criteria often made it difficult for businesses with poor credit history or no assets to secure a loan.

With the rise of alternative finance options, businesses can access a variety of tailored funding solutions, including bad credit business loans, small business loans, and specialised funding for VAT or tax payments, making it easier than ever to find the perfect financial solution.

According to a 2022 UK Small Business Finance Markets report, alternative finance providers supplied 32% of new finance to smaller businesses, illustrating the growing reliance on these non-traditional funding solutions.

How Do I Get Money to Start a Business?

Kick-starting a business requires capital. Here are three common ways to raise funds:

  1. Personal Savings: A high percentage of startups are self-funded. However, this approach may not be suitable for everyone, especially if you’re looking to start a capital-intensive business.
  2. Friends and Family: Another common method of raising startup capital is borrowing from friends and family. While this can be a convenient way to raise funds, it could potentially strain personal relationships.
  3. Business Loans: Through institutions like JPM Capital, entrepreneurs can access business loans designed to help startups hit the ground running.

If your business has specific needs, like needing to pay VAT or taxes, funding options like VAT funding and tax funding can provide a much-needed cash flow injection.

How Long Does It Take to Get a Business Loan in the UK?

The length of time it takes to secure a business loan in the UK can vary greatly, depending on the type of loan and lender. Traditional banks can take weeks or even months to approve a loan. However, alternative lenders like JPM Capital can often approve loans in as little as 24 hours.

Where’s the Best Place to Get a Business Loan?

The best place to secure a business loan depends on your business needs and circumstances. If you require funds for business expansion or refurbishment, Refurbishment/Expansion Funding might be an ideal choice.

Perhaps your business needs to boost its working capital during a lean period. In this case, Working Capital Funding could be your best bet.

Businesses in specific niches can also find tailored funding solutions. For example, a cryotherapy business like CryoBurst might require specialised equipment. A lender who understands the specific needs and challenges of this industry will be in the best position to offer the most suitable funding solution.

Conclusion

Securing a business loan in the UK can be straightforward and efficient, thanks to the variety of funding solutions offered by alternative finance providers. Whether you’re starting a new business, dealing with a bad credit history, or looking to expand, there’s likely a loan product out there tailored to your specific needs. Remember, choosing the right funding solution for your business is a critical step towards its success.

FAQs

  1. Is it hard to get a business loan in the UK? It can be challenging to secure a business loan from traditional banks, especially if you have a poor credit history or lack collateral. However, with alternative finance providers like JPM Capital, getting a business loan can be a straightforward process.
  2. How do I get money to start a business? Common ways to raise startup funds include personal savings, borrowing from friends or family, or securing a business loan from a lender like JPM Capital.
  3. How long does it take to get a business loan in the UK? While traditional banks can take weeks or months to approve a loan, alternative lenders like JPM Capital can often approve loans in as little as 24 hours.
  4. Where’s the best place to get a business loan? The best place to get a business loan depends on your specific business needs and circumstances. JPM Capital offers a variety of funding solutions, including bad credit business loans, small business loans, VAT and tax funding, and more.

Business Loans Secured: Unlocking the Potential for Your Business

June 27, 2023
Two business professionals shaking hands after securing a business loan

If you’ve found yourself asking, “What is a secured business loan?” or “Is a business loan secured or unsecured?”, you’re not alone. Navigating the world of business finance can be daunting, but at JPM Capital, we’re here to guide you through your journey.  

What is a Secured Business Loan?

A secured business loan is a type of business financing where the borrower pledges an asset (like property, equipment, or invoices) as collateral. The loan is ‘secured’ against this collateral, providing the lender with some level of assurance that they can recover the money if the borrower defaults on the loan.

Secured vs Unsecured Business Loans

Unlike secured loans, unsecured business loans do not require any collateral. This could be a more suitable option for businesses without large assets but bear in mind, lenders often require a good credit history for such loans. This is where Bad Credit Business Loans can offer an alternative solution.

Remember: In business financing, there’s no one-size-fits-all solution. The best choice depends on your individual business needs and circumstances.

How Do Business Loans Impact Your Credit?

Business loans can have a significant impact on your credit, especially if you have a bad credit history. But don’t worry! At JPM Capital, we understand that every business has unique financial circumstances. That’s why we provide a variety of options, such as Small Business Loans and Alternative Finance solutions.

Where’s the Best Place to Get a Business Loan?

Based on the latest UK statistics, one of the best places to secure a business loan is through a financial institution that provides bespoke solutions tailored to your needs, like JPM Capital. We provide an array of solutions, including Working Capital Funding and VAT Funding, to support the growth and stability of your business. Whether you’re seeking to fund your tax obligations with Tax Funding or looking to grow with Refurbishment / Expansion Funding, our experienced team can help guide you to the most suitable funding solution.

Conclusion

In essence, secured business loans offer a reliable path for businesses to receive the funding they need to grow and thrive. By utilising assets as collateral, they can access larger loan amounts, often with more favourable interest rates. For more information on secured business loans, please visit our Business Loans page or get in touch with our friendly team.

FAQs

1. What is a secured business loan? A secured business loan is a type of loan that requires collateral, like property, machinery, or other business assets. 2. Is a business loan secured or unsecured? A business loan can be either secured (requires collateral) or unsecured (doesn’t require collateral but may require a good credit score). 3. Do business loans go on your credit? Yes, business loans can affect your credit. Timely repayments can improve your credit score, while late or missed payments can harm it. 4. Where’s the best place to get a business loan? The best place to get a business loan is at a reliable financial institution like JPM Capital, which offers a wide range of tailored business loan options. Discover more about our services and funding solutions by visiting our About Us page, exploring our diverse Case Studies, or reading insightful articles on our Blog. You can also find out who we fund here, or learn about our Partner Program if you wish to collaborate with us. 5. Can I apply for a business loan with bad credit? Yes, at JPM Capital, we offer Bad Credit Business Loans to support businesses that may have encountered financial difficulties in the past.

Personal Guarantee Insurance: Safeguard Your Business

June 21, 2023

Personal Guarantee Insurance: Safeguarding Your Business

personal guarantee insuranceWhen it comes to securing business loans, there’s no shortage of challenges that entrepreneurs face, particularly for those dealing with bad credit. Bad credit business loans can be a lifeline for many, and having a strategy in place to manage risk is paramount. One such strategy is obtaining personal guarantee insurance.

“Just as you protect your business premises with insurance, you can also shield your personal assets through personal guarantee insurance.” – JPM Capital

Personal guarantee insurance, designed to offer a layer of protection for business owners, covers a percentage of the risk in case of a business default. This financial buffer safeguards your personal assets if your business is unable to repay the loan. For more information about business financial support, visit Gov.uk – Business Finance and Support.

Let’s break down the key components of personal guarantee insurance and how it aligns with various business funding solutions available on our platform, JPM Capital.

The Need for Personal Guarantee Insurance

Starting and running a business can be a risky endeavour. When you secure funding through avenues such as small business loans or alternative finance, lenders often require a personal guarantee. This means you, as a business owner, pledge your personal assets as collateral in the event your business fails to repay the loan. The Financial Ombudsman Service can help you understand your rights in this scenario.

Now, you may wonder, why would anyone take on such risk? The answer is simple: securing funds, especially with bad credit, can be a critical move for a business to grow, refurbish, or expand. But how can you mitigate this risk? This is where personal guarantee insurance steps in, ensuring that your risk doesn’t outweigh the potential reward.

How Personal Guarantee Insurance Works

The role of personal guarantee insurance is simple: it protects a portion of your personal net worth in case of a business default. Depending on the policy, coverage typically ranges from 60% to 80% of the guaranteed amount. This information is significant for those seeking refurbishment or expansion funding. Investing in your business’ growth can result in increased revenue in the long term, and personal guarantee insurance ensures that you’re able to make these ambitious strides without risking everything you own. For more detailed insights, check out resources from the British Business Bank.

Benefiting from JPM Capital’s Solutions

At JPM Capital, we offer a comprehensive range of funding solutions. From working capital funding to VAT funding, we ensure businesses have access to the financial support they need, regardless of their credit history. The Federation of Small Businesses (FSB) offers additional resources to aid small businesses in their journey.

Personal guarantee insurance can be a beneficial addition when utilising these services. For instance, VAT or tax funding often requires a personal guarantee. By securing insurance, you not only protect your personal assets but also improve the chances of loan approval by demonstrating your commitment to repaying the loan. If you find yourself struggling with business debt, the Money Advice Service can provide valuable advice.

Our experienced team at JPM Capital is dedicated to guiding you through the process and helping you find the right solution to meet your unique business needs.

Visit our blog to keep up-to-date with industry trends and to gain further insights into the benefits of personal guarantee insurance and other funding options. With the right tools and knowledge, you can navigate your business’ financial journey confidently and ensure its continued success.

“The most effective way to manage risk is to think about it in comprehensive terms and to integrate risk management into the fabric of an organization.” – Harvard Business Review

Through personal guarantee insurance, you are taking a proactive approach to risk management and safeguarding the future of your business. Reach out to the experts at JPM Capital to discuss how we can tailor our funding solutions to your specific circumstances. We’re here to help you succeed.

To discuss funding today please fill out our get a quote form
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Call 01244 450870

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