In 2016, 16 out of 23 European countries, and 9 out of the 11 Asia-Oceania countries sampled, witnessed a decrease in the corporate bankruptcy rates, according to Dun and Bradstreet. This decline happened in the midst of a slow economic growth rate, and while it implies improvement, many entrepreneurs still struggle with financing their ventures. Most companies still finance working capital requirements with business loans. Filing for bankruptcy prohibits and limits this type of financing.
Below are ways to finance your business after filing for bankruptcy.
Raise Your Credit Score
While filing for different types of bankruptcy offers you a clean slate from your past debts, it also derails your credit score by at least seven years. Financing and trying to apply for a small business loan with bad credit during this period is difficult. The first step is to raise your credit score to build a reputation that enables you to borrow enough funds. You will want to select a credit repair company like iMax that is reputable and has exceptional reviews. This company seems promising as its main agenda is to improve your credit score using legal procedures, which is what you should look for in a credit repair company. A credit repair company should improve your chances at a line of credit and other financing options in no time.
Partner With a Creditworthy Person
The main reasons people venture into entrepreneurship are diverse, ranging from discontent at their workplaces, retrenchment, pursuing their dreams, and bankruptcy. Many of these reasons involve beginning from scratch. Without a reputable financial history, financing is even more difficult. Partnering with a person who has a high credit score or an angel investor in your business eases the process of securing a loan for your business. However, this option also means that you co-own the business, which limits your decision-making process.
Attempt Crowdfunding
Crowdfunding is a modern method of financing that capitalizes on goodwill from friends, but mostly strangers online. Ideally, you want to pitch your business idea or startup model online and hope that it is attractive enough to sell itself. This kind of business financing is wholly reliant on how well you pitch it to the public. The benefit is that your creditworthiness or lack thereof does not affect the amount you get. Offering an incentive to anyone who pledges an amount such as a free sample or a signed copy of your product is also paramount.
There are various ways to finance a business, but most of them involve your credit worthiness, which limits your options if you have a poor credit score history. A line of credit is also limiting for a startup as it offers small amounts regularly. Raising your credit score, partnering with a creditworthy person and crowdfunding ensures you hack your way into securing funding.
