How To Get Bad Credit Small Business Loans

Many retailers have been bad credit merchant account battered by the economic downturn of the last two years. For many retail businesses, this has meant delaying vendor bills, tapping into savings or other tactics to try and make it until business conditions improved. While the best option for any small business is always an SBA type loan, the reality is that most businesses will not get approved for this type of loan in today's restricted credit environment.

For these retail businesses, their main option for bad credit small business loans was to get a merchant cash advance from their credit card payments processor. These cash advances are not true loans, but rather, cash advances based on future credit card receivables. Such advances are almost always characterized by factor (interest) rates as high 50%, high upfront fees, high hold-back (payment) rates, and the requirement to switch credit card processors and/or buy equipment.

Over time, these merchant cash advance loans can become a crushing burden to businesses that use them, as they watch a large percentage of their daily sales volume go to paying back the advance and associated interest.