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Mistakes To Avoid When It Comes To Bad Credit Loans

If you have less than perfect credit, you may know how much of a pain it can be looking for loans. With that said, going into the situation without a clue as to how it works is not wise. Before you move forward and start looking for bad credit loans, you should educate yourself about mistakes to avoid along the way.

Failing To Check Your Credit Report

This is important since it is the basis lenders will be using to determine whether or not to give you a loan. It is common for wrong things to be listed on credit reports and this can significantly change the terms of your loan. While lenders are sometimes willing to offer bad credit loans, it usually comes at a premium, and a better credit score can save you a few dollars.

Make sure that you get a copy of your credit report before applying for a loan. Dispute anything that is incorrect and wait for this to be overturned before you apply for a loan. This will increase the chances of being approved and getting a better deal.

Refusing To Shop Around For Better Deals

There is something very wrong with jumping at the first good-looking offer that comes your way. You may miss out on a loan with better terms if you are too quick to act. It is understandable that finding a lender who is willing to extend credit despite your rating may make you anxious, but it is still important for you to comparison shop to ensure there is nothing better available.

Being Dishonest On Your Application

Some people are dishonest when applying for loans because they know they would not qualify otherwise. In some cases they have friends, and family members pretend to be their boss and they stretch the truth when entering their income. This is a huge mistake that will never have a positive outcome.

Being denied for a loan means that the likelihood of you being able to pay it back is low. If you lie to qualify, chances are you will have problems meeting the terms, which can make your credit poorer than it already is.

Ignoring The Small Print On The Bottom

The large, colorful writing that is promising you the best possible deal is probably more interesting than the small, black letters at the bottom of the page. Even so, make sure that you digest every word of it. Ignoring it is a mistake since it usually contains information about extra fees and special rates. If you sign anything without reading, it is sure to be a recipe for disaster.

The good thing is that many lenders are more than willing to do business with those who have bad credit. With that said, try your best to avoid all of the mistakes mentioned here. Even though your credit rating is already bad, there is no reason to do anything that can make it far worse.

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The Challenges Of Raising Money For Your Startup

Entrepreneurs often struggle to find sources of finance to get their startups rolling. Lack of financial history as well as unproven products or services, as well as a highly competitive environment often make it extremely difficult to raise funds.

Traditional finance may not always be the best option when it comes to raising funds for a startup - however they should not be ignored. The problem with raising seed capital (aside from the lack of historical data and financial records) is the fact that banks have tightened up on their lending practices ever since the sub prime scandal. In fact the United States government has forced financial institutions to be a lot more conservative in the their lending practices - and the current economic environment has also made banks a lot more reluctant to lend money to startups - many of which fail in the first year of operation.

So where does an entrepreneur who is willing to put in the hours and has a great idea go to find that elusive seed money?

The two traditional sources of funding are friends and family and venture capitalists. However, bit of these approaches can have their own fair share of potential problems.

Venture capitalist firms bring more to the party than simple funding. Many have staff and expertise that can help the entrepreneur with research and marketing as well as office space, accounting and administration. In short they will help with all the things that make a business tick. They'll also follow up with further capital as the business grows and becomes more successful. The down side is that they will want a big slice of equity. They also may take a short term view (i.e. realize profit and exit) than that of the founders.

The second option is to approach friends and family for funding. This sort of funding is based on these people actually liking you - that's great but the downside is that they very rarely bring anything to the party except capital. They don't have the business experience to provide meaningful input and if you require any followup capital traditional sources of funding might not be very happy with the due diligence that was undertaken in the initial funding stage. In addition mixing a personal relationship with a strictly business arrangement can put enormous strain on that relationship.

Funding can be difficult, however with the correct business plan a loan from a traditional financial institution is possible - especially if you have a long and unblemished record with your bank. As for the other sources? The choice can be difficult, but then again realizing your dream may make it all worth it.