Taking out an equipment loan to buy tanning beds with bad credit is undoubtedly difficult, but it is not impossible. We have gathered here some tips to help you get the funds you need to get your tanning salon business off the ground, even when your credit history makes you an ‘undesirable' candidate.
Banks are not likely to give you a loan for tanning beds or any other business equipment for that matter if you have bad credit, so forget about them and concentrate on the financing institutions who will still welcome your business. Smaller financing firms that partner up with tanning bed manufacturers are generally more lenient. You can also turn to financing companies that actually focus their efforts on bad credit business loans.
Just because your personal credit score is below 640 does not mean you are hopeless. Most equipment financing companies only look at your business credit scores. If you are safe in that area and your business performance shows that you will be able to debt service the loan, then it's almost always a done deal – you can easily take out loans for tanning beds even with bad credit.
Special terms and conditions
But what if even your business loan credit score is low? You can still take out a loan to buy tanning beds despite your bad credit, but you will be forced to yield to more stringent loan terms and conditions. Understand that the financing company is taking a high risk granting you funding, and that it is normal for them to charge you substantially higher interest rates than they would regular borrowers who have clean credit. You will be subjected to an entirely different lending criterion.
Some lenders will require you to put up substantial collateral before they grant you funding for tanning beds and other business equipment. If you do not have collateral, the financing company may ask for a percentage of your future receivables to make sure that you will pay, or even blanket lien both your personal and business assets.
Repairing your bad credit
If you are unwilling to be subjected to the special terms and conditions that financing companies apply to business owners who want to fund their purchase of new equipment but have bad credit, then you can choose to wait it out and repair your credit slowly but surely. Work actively on establishing a new credit line or two. Pay your bills regularly and on time to infuse better ratings into your credit report. How do you get new creditors to trust you when you have bad credit? Try low-limit credit cards – they will give you a good start. Once your personal credit ratings start to pick up, financing companies will start to trust you more.
You should also actively clean your business credit line, because many business financing companies give more premium to this than your personal credit history. When your tanning salon's bottom lines go up, your chances of being able to secure loans to expand and buy more tanning beds goes up, too.