Child care is a financial variable. Just ask any single or double-income household. Worrying about paying for your children’s day care is always a financial balancing act. After all, there is the well-being of another person to consider. No, that statement doesn’t refer to the well-being of the child in question or to the financial strain put on the parents. Both areas are important, but there is someone else in this equation that everyone tends to forget about; the child day care provider. Their business goes along with the ups and downs of your household budget - do they have any business credit line options?

If you think child care is a bone of fiscal contention in your household, just imagine what the child day care provider goes through. They provide a temporary service that can be affected by factors such as: the age limit of the children they care for, holidays and summer vacations, illness, inclement weather, or even regulatory slowdowns. All of these examples mean a varying income from month to month. The stress of an unstable financial situation often results in debt and bad credit by proxy.

Are there any options for a business owner or self-employed service provider with poor credit? Is there any way they can make a financial turn around and get back on solid footing? Yes, there is. There are resources called bad credit business loans and this article will reveal what they are and how they work.

Credit By Any Other Name

Funding resources that are marketed toward borrowers with bad credit are often referred to as bad credit business loans, but what you are really looking for is unsecured financing.

Unsecured financing typically has a more lenient qualification process. Lenders will need to verify both a borrower’s income and expenses. Despite what a lot of ads claim, this does involve a credit check. The difference is other factors are also taken into consideration for approval, like:

• Verifiable income
• The establishment of a favorable payment history with creditors
• Past unsecured lending history

These loans don’t require collateral. Meaning, they are not tied to a piece of personal property or physical assets. A traditional bank loan requires collateral as insurance so that if you default on the loan, the bank can regain the loss. Seeing as unsecured lenders don’t play by traditional rules, what you are looking at is a bad credit business loan risk assessment.

Collateral-free loans translate to high-risk lending. For that reason, the lender has to make sure the loans are worth the risk. They have to verify that you have the income to back up a payment agreement before that agreement is entered into. That’s why they assess your income and your credit in some form or another. The assessment also sets parameters like your interest rate and payment amount.

A Note on Repayment

Bad credit business loans don't run on a repayment honor system. Lenders do have fiscal and legal recourse if you default. Always borrow responsibly. If you have bad credit already, run a personal risk assessment to insure you will be able to pay back what you borrow.