Bankruptcy can be one of the most difficult situations for an entrepreneur to be in. It is a tough time for any business, where it is financially struggling without a path ahead. It puts your life as well as your entrepreneurial dreams on hold. However, do not mistake it for failure or the end of the line for you. It is still possible for you to secure a small business loan even during bankruptcy. However, you will have to put in a lot of effort and hard work to avail a loan.
Approaching the entire process with an open mind may take you a long way!
What Happens to My Credit Score?
Despite bankruptcy, your credit score for business loan will still be the primary factor that determines whether or not your loan application should be approved. Although you may assume that bankruptcy completely destroys your credit, the fact is a bit more complex. Bankruptcy indeed shreds a quite a few points off your credit score which, of course, is not that great.
However, the negative impact of your bankruptcy on your credit rating is dependent on the amount of debt being discharged, how many accounts are under felony and how many accounts are current. In fact, no matter how bad your credit score was at the time you declared bankruptcy, there is still a scope of improvement.
The bankruptcy tends to stay on your records for an approximate seven to ten years, but your credit score can definitely be improved. Many banks / Non-Banking Financial Institutions (NBFCs) need a certain time period to pass by – between one to seven years (depending on your lender) – before they consider your loan application.
More than Just a Waiting Game
Time plays a vital role while securing an online business loan after bankruptcy. However, it is not the only factor that is taken into consideration. As a matter of fact, your lender will consider your business as a whole during the underwriting process.
You may be surprised that there are many lenders in the market who are willing to take bigger risks but in exchange for a potentially a larger payday. Believe it or not, but it is in fact possible to get a personal loan almost immediately after you declare bankruptcy. On the other hand, business loans can be a bit difficult to secure. You might have to jump through some additional hoops so as to prove the creditworthiness of your business plan.
Since we are specifically looking at business loans only, the good news is that it is indeed possible to secure one even after bankruptcy.
How Can I Find the Right Lender?
You have to understand that not all lenders will have the same bankruptcy policies. Hence, it is essential that you consider keeping your business accounts with an institute that is willing to extent you credit.
When it comes to looking for lenders to secure small business loans, make sure that you are gathering as much information as you possibly can about the products and services they offer to customers with bankruptcy on their record.
We know for a fact that bankruptcy has a huge impact on your life and business. However, it certainly does not mean that you can no longer secure funds for your business.
If you are going through a similar situation, contact our team and let us know help you in your path ahead. With us, at Finserv MARKETS, applying for a business loan is quick, easy, and can be processed in no time. In fact, we provide bespoke services that can be customized to your business needs. So, why look elsewhere? Apply for Bajaj Finserv Business Loan with us, today!
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