I need a $3,000 small business loan and I have bad credit, what’s the best way to get a loan like that? I want to start a windshield repair/headlight restoration business. I have really bad credit. Is it impossible for me to get a loan like that?

It may not be impossible to obtain a loan to start a business when you have really bad credit, but your options become severely limited.

It is unlikely that the SBA or an institutional lender will approve a loan for you. So, you would have to go to a lender that specializes in lending at high risk. This would mean you will pay a very high rate of interest on the money you borrow. Not a good idea if you are trying to start a business.

The better option would be to find a family member, friend, or acquaintance that would be willing to invest in your enterprise. Write a simple business plan and include details about how you will market your services. Set some goals that would project a planned reduction of the debt after a start-up period. Structure a repayment plan that includes a return on their investment but still allows you enough working capital to cover the operating costs of your business. Then sit down with one or more potential investors and go over it. Let them know you intend to formalize the terms of any agreement in writing and include a signed promissory note for the amount you borrow.

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