Archive forBad Credit

Lender Gets Credit Line

Santa-Ana based LoanNow started the new year by securing a $50 million line of credit to expand its loan portfolio nationwide, according to president and Chief Operating Officer Miron Lulic. The online lender provides credit options to borrowers with bad credit. It’s originated approximately $10 million in personal loans since launching in June 2014.

The line of credit came from an undisclosed institutional investor in New Jersey, according to the company. It’s from a specialty finance fund focused on credit- and asset-based investments.

LoanNow typically serves middle-income borrowers with credit scores below 650. It makes loans of up to $5,000 with no origination fees or prepayment penalties. It currently occupies approximately 10,000 square feet of office space in Santa Ana and has 50 employees.

LoanNow previously raised $6 million in seed capital in January 2014, according to a news report.

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In Short: Jan 7

Ron Sowell#x2019;s open mic

Unity of Kanawha Valley will again be home to Ron Sowell#x2019;s Open Mic this Friday at 7:30 pm, a venue that has launched the music of many a local act.

Performers sign up starting at 7 pm and each act performs two songs. General admission is $5, with performers, seniors, and kids charged $2. Unity of Kanawha Valley is located at 804 Myrtle Rd.

Kurt Green at Comedy Zone

Comedians Kurt Green with opening act Ranaan Hershberg are featured at the Comedy Zone shows at 8 pm Friday and 7 and 9 pm Saturday. Green is a self-described #x201c;Army vet, actor, musician, substitute teacher and bad credit risk.#x201d; He observes everyday life and takes it to the stage. Tickets are $10 with overnight packages available. For reservations, call 304-744-4641 or visit

Celtic Calling announced

Charleston will celebrate Celtic heritage during the inaugural Celtic Calling weekend coming in March. The event will complement the Mountain East Conference weekend.

#x201c;In the winter, people typically have pent up desire to get out of the house. The Celtic Calling gives visitors that reason. This festival is an exciting new addition to the Charleston scene,#x201d; says CVB President Alisa Bailey.

From March 4 to 6, Charleston businesses, restaurants and retailers will host Scottish and Irish-themed entertainment and events with special Celtic offerings. The schedule of events include a screening of the movie #x201c;The Commitments,#x201d; bagpipe and traditional music, a musical instrument workshop, the Celtic Calling Kilt 5K Run/Walk, a FOOTMAD concert featuring the Celtic band FOOTMAD Diamh, the Celtic Calling Family Bike Tour, a pop-up Celtic Theater Competition and an homage to WB Yeats.

For a complete schedule and additional details, visit

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EDITORIAL: Brave new bad-credit world

Using its giant economy as a draw, Beijing has both courted and intimidated the smaller nations on its periphery. China has advanced aggressive territorial claims in the battle to control the vital shipping lanes of the South China Sea, but … more gt;

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Sunday Sitdown: NBA legend Isiah Thomas plays Santa on native West Side

NBA Hall of Famer Isiah Thomas is known by many monikers: the legend who turned the last-place Detroit Pistons into back-to-back NBA champions; 12-time NBA All-Star; one of the 50 greatest players in National Basketball Association history. Underprivileged kids in the West Side neighborhoods where he grew up, however, know him as none of those. They call him Santa. For the fourth year in a row, the 54-year-old one-time professional and collegiate basketball coach and businessman descended on East Garfield Park in December with toys, coats, clothing, bikes and computer tablets for more than 400 kids at Marillac Social Center.

On behalf of the foundation named for his mother, a tough-but-kind social worker on whom a made-for-television movie was based, Thomas played Santa at Marrilac on Dec. 18, with a repeat the next day for hundreds more kids at JLM Life Center. Before that, he and his foundation, Marys Court, served Thanksgiving dinner to the homeless at Our Lady of Sorrows Basilica. But his passion isnt just helping the poor in the neighborhoods he calls home court — though he can never forget growing up in abject poverty, one of nine children of his single mother. He also seeks to address the gang violence that holds them hostage, having helped form The Peace League in 2011 with the Rev. Michael Pfleger, which grew into the nationally spotlighted basketball tournament for gang members at St. Sabina church. He sat down with reporter Maudlyne Ihejirika. A condensed transcript follows.

Q: After 13 years with the Pistons, you retired in 1994 to become part owner and executive with the expansion Toronto Raptors; a television commentator; owner of the Continental Basketball Association; head coach of the Indiana Pacers; executive and head coach with the New York Knicks; mens basketball coach at Florida International University; and this year, team president of the Knicks sister WNBA team, the New York Liberty. But you still consider the Garfield Park and Lawndale neighborhoods your home?

A: I never really left. I grew up right here on Jackson and Homan. My family still lives here. I remember all of my addresses: 415 S. Central Park, 3322 W. Congress, 3340 W. Congress, 135 S. Menard, 1145 Latrobe. Those were the spots. I went to Our Lady of Sorrows, St. Catherine for a year, and Resurrection, which is now Christ the King. Then I went to St. Joseph High School, left in ’79 for Indiana University, played there until ’81, then went to the NBA. And even when I got drafted and played in Detroit, I came home every summer and spent all my time on the West Side here.

Q: Youre credited with a shrewd business sense dating back to your dealings as president of the NBA Players Association in the late 80s and early 90s, and your business ventures have been successful, like your diverse holding company, Isiah International LLC, through which youve built businesses and invested in minority communities, much like Earvin Magic Johnson. Your Isiah Real Estate has also been successfully involved in Chicago and regional real estate projects, and in 1999, you became the first African-American to sit on the Board of Governors of the Chicago Stock Exchange, serving until 2002. But the circumstances under which you grew up stay with you?

A. All the time. I was raised mainly by my mom, nine of us, seven boys, two girls. My dad left home when I was six. But you know, I always have to give the qualifier. My Dad was severely depressed, had just lost his job, and couldn’t support the family, and mom was like — you know, we didn’t know about depression then. They didn’t understand its effects, and there was no treatment for it or anything, so they separated.

We got by the same way a lot of people in poverty do. They find a way. And somehow my Mom found a way. There was a lot of people helping, a lot of support. That would be the youth center, recreation center, grade school. Even though there were a lot of days we didn’t eat, and a couple times, we were homeless. We grew up in affordable housing, and got set out on the street a couple of times. So it was like, by the time all of us turned 20, we all had bad credit, because she had used everybody’s name and credit along the way, you know?

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Rhode Island Housing Company Welcomes Those with Bad Credit

New Era Estates, LLC is pleased to announce that part of their Rhode Island real estate services new initiatives, is a quality First-Time Homebuyers Program. One particular group of people looking for the right Rhode Island housing may have enough capital to purchase, but are unable to show adequate strength in their credit history to obtain a traditional mortgage from a bank or lender. Another segment of first-time buyers may have good credit, but want to speed the buying process by paying cash for the purchase. In each instance, the professionals at New Era Estates can provide the kind of assistance that can get the transaction done.

Looking for homes for sale in Rhode Island, can seem overwhelming to some. There are loan approvals, searching for listings, placing an offer and other documentation which can be frustrating and even disappointing if it doesnt result in an approved mortgage. With the knowledge and experience of the New Era professionals in real estate, Rhode Island buyers will have an experience that is second to none.

If you are the more luxurious docile type, Newport, Rhode Island real estate is available in a range of housing styles and at prices to fit most budgets. If youre more suited for the urban life, the professionals at New Era can help you look for Rhode Island real estate in any city across the beautiful Ocean State. Although price is an important element for most home buyers, there are other factors which must be taken into consideration if a buyer does not want to be caught off guard.

A potential homeowner may not know all the things to look out for when searching for the right listing. Identifying the number of bedrooms, bathrooms and style is the easy part. Professionals can provide guidance about property taxes, school districts and shopping opportunities nearby. The team at New Era even arranges for property inspections and title checks as part of the home buying process.

Another common error with first-time home buyers is getting the elements of the transaction in the wrong order. A logical progression of steps in the purchase of a new home is important. Working with real estate professionals will help to ensure that pre-approval for funding is in place before a purchase offer is in place, for instance. New Era would be more than happy to help you avoid these home buying pitfalls, and emphasizes building strong relationships with customers on the pillars of trust and results.


Contact: Media Relations

Address: 2130 Mendon Road Suite 3-243, Cumberland, RI

Telephone Number: (401) 244-7444 Ex.101

Fax Number: (401) 889-4495


Distributed by HeadlinePlus Press Release Distribution

Media Contact
Company Name: New Era Estates, LLC
Contact Person: Media Relations
Phone: (401) 244-7444 Ex.101
City: Cumberland
State: Rhode Island
Country: United States

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The risks — and benefits — of letting algorithms judge us

Algorithmic scoring is everywhere

This story has spread because its just the sort of behavior youd expect from the authoritarian government in China. But theres little about the scoring systems used by Sesame Credit thats unique to China. All of us are being categorized and judged by similar algorithms, both by companies and by governments. While the aim of these systems might not be social control, its often the byproduct. And if were not careful, the creepy results we imagine for the Chinese will be our lot as well.

Sesame Credit is largely based on a US system called FICO. Thats the system that determines your credit score. You actually have a few dozen different ones, and they determine whether you can get a mortgage, car loan or credit card, and what sorts of interest rates youre offered. The exact algorithm is secret, but we know in general what goes into a FICO score: how much debt you have, how good youve been at repaying your debt, how long your credit history is and so on.

Theres nothing about your social network, but that might change. In August, Facebook was awarded a patent on using a borrowers social network to help determine if he or she is a good credit risk. Basically, your creditworthiness becomes dependent on the creditworthiness of your friends. Associate with deadbeats, and youre more likely to be judged as one.

Your associations can be used to judge you in other ways as well. Its now common for employers to use social media sites to screen job applicants. This manual process is increasingly being outsourced and automated; companies like Social Intelligence and Evolv automatically process your social networking activity and provide hiring recommendations for employers. The dangers of this type of system — from discriminatory biases resulting from the data to an obsession with scores over more social measures — are too many.

The company Klout tried to make a business of measuring your online influence, hoping its proprietary system would become an industry standard used for things like hiring and giving out free product samples.

Local bankers judgment vs. computer crunching

The US government is judging you as well. Your social media postings could get you on the terrorist watch list, affecting your ability to fly on an airplane and even get a job. In 2012, a British tourists tweet caused the US to deny him entry into the country. We know that the National Security Agency uses complex computer algorithms to sift through the Internet data it collects on both Americans and foreigners.

All of these systems, from Sesame Credit to the NSAs secret algorithms, are made possible by computers and data. A couple of generations ago, you would apply for a home mortgage at a bank that knew you, and a bank manager would make a determination of your creditworthiness. Yes, the system was prone to all sorts of abuses, ranging from discrimination to an old-boy network of friends helping friends. But the system also couldnt scale. It made no sense for a bank across the state to give you a loan, because they didnt know you. Loans stayed local.

FICO scores changed that. Now, a computer crunches your credit history and produces a number. And you can take that number to any mortgage lender in the country. They dont need to know you; your score is all they need to decide whether youre trustworthy.

This score enabled the home mortgage, car loan, credit card and other lending industries to explode, but it brought with it other problems. People who dont conform to the financial norm — having and using credit cards, for example — can have trouble getting loans when they need them. The automatic nature of the system enforces conformity.

Enforcing conformity in the Internet age

The secrecy of the algorithms further pushes people toward conformity. If you are worried that the US government will classify you as a potential terrorist, youre less likely to friend Muslims on Facebook. If you know that your Sesame Credit score is partly based on your not buying subversive products or being friends with dissidents, youre more likely to overcompensate by not buying anything but the most innocuous books or corresponding with the most boring people.

Uber is an example of how this works. Passengers rate drivers and drivers rate passengers; both risk getting booted out of the system if their rankings get too low. This weeds out bad drivers and passengers, but also results in marginal people blocked from the system, and everyone else trying to not make any special requests, avoid controversial conversation topics and generally behave like good corporate citizens.

Many have documented a chilling effect among American Muslims, with them avoiding certain discussion topics lest they be taken the wrong way. Even if nothing would happen because of it, their free speech has been curtailed because of the secrecy surrounding government surveillance. How many of you are reluctant to Google pressure cooker bomb? How many are a bit worried that I used it in this essay?

This is what social control looks like in the Internet age. The Cold-War-era methods of undercover agents, informants living in your neighborhood and agents provocateurs is too labor-intensive and inefficient. These automatic algorithms make possible a wholly new way to enforce conformity. And by accepting algorithmic classification into our lives, were paving the way for the same sort of thing China plans to put into place.

How to fix it

It doesnt have to be this way. We can get the benefits of automatic algorithmic systems while avoiding the dangers. Its not even hard.

The first step is to make these algorithms public. Companies and governments both balk at this, fearing that people will deliberately try to game them, but the alternative is much worse.

The second step is for these systems to be subject to oversight and accountability. Its already illegal for these algorithms to have discriminatory outcomes, even if theyre not deliberately designed in. This concept needs to be expanded. We as a society need to understand what we expect out of the algorithms that automatically judge us and ensure that those expectations are met.

We also need to provide manual systems for people to challenge their classifications. Automatic algorithms are going to make mistakes, whether its by giving us bad credit scores or flagging us as terrorists. We need the ability to clear our names if this happens, through a process that restores human judgment.

Sesame Credit sounds like a dystopia because we can easily imagine how the Chinese government can use a system like this to enforce conformity and stifle dissent. Our own systems seem safer, because we dont believe the corporations and governments that run them are malevolent. But the dangers are inherent in the technologies. As we move into a world where we are increasingly judged by algorithms, we need to ensure that they do so fairly and properly.

Editors Note: A previous version of this essay included First Advantage among companies that use social media to screen job applicants and provide recommendations. The company, through a representative, says it doesnt use social media as part of its process.

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ETF Preview: ETFs, Futures Tumble on China Halt, Oil Slump

United States Oil Fund (

): -3.7%

VIX Short-Term Futures ETN Ipath (

): +9.2%

SPDR Select Sector Fund – Financial (

): -2.1%

Broad-Market Indicators

Most broad-market exchange-traded funds, including SPY, IWM, IVV
and others, sharply lower. Likewise, actively traded PowerShares
QQQ (QQQ) was down 2.8%.

US stock futures logged sharp losses as more bad news from
China triggered a selling spree in oil and global equity markets.
Beijing orchestrated a 0.5% devaluation in the beleaguered yuan
after data showing that Chinese foreign exchange reserves fell by a
record amount in December. Trading has been halted 30 minutes into
its opening – the shortest trading day for Chinese stocks.


continued to tumble, sinking to a 12-year low of $32.10.

The slump in global markets overshadowed the jobless claims
data, which showed a 10,000 decline in initial jobless claims for
the week ended Jan 2 to 277,000 barely registering a response from
Wall Street. On Friday, the Labor Department will release the
pivotal non-farm payroll report for December.

Power Play: Health Care

Health Care SPDR (XLV) was down 1.2% while other health care
funds Vanguard Health Care ETF (VHT) and iShares Dow Jones US
Healthcare (IYH) were flat. Biotechnology fund iShares NASDAQ
Biotechnology Index (IBB) was down 2.5%.

Dynavax Technologies (DVAX) was up 21.9% after the
biopharmaceutical company reported encouraging preliminary top-line
results from a Phase 3 trial of its hepatitis B vaccine HEPLISAV-B.
The company said it will resubmit the HEPLISAV-B Biologics License
Application (BLA) at the end of Q1, and anticipates a six-month
review by the US Food and Drug Administration.

Winners and Losers


Select Financial Sector SPDRs (

) was down 2.2%. Daily Financial Bull 3X shares (FAS) was down 6.1%
while its bearish counterpart, FAZ, was up 6.2%.

ARMOUR Residential REIT (ARR) was down 4.6% after it said it has
repurchased approximately 16.9% of its total outstanding common
stock during 2015 for an aggregate purchase price of approximately
$160 million. The repurchases were made against the companys
previously announced common stock repurchase program. Approximately
1.9 million shares remain available for repurchase under the
authorization. As of December 31, the company has approximately
36.7 million common shares outstanding.


Technology Select Sector SPDR ETF (XLK) was up 0.02% while other
tech funds iShares Dow Jones US Technology ETF (IYW), iShares
Samp;P North American Technology ETF (IGM) and iShares Samp;P
North American Technology-Software Index (IGV) were inactive. SPDR
Samp;P International Technology Sector ETF (IPK) was also

Semiconductor ETFs SPDR Samp;P Semiconductor (XSD) and
Semiconductor Sector Index Fund (SOXX) were flat in


SunEdison (SUNE) was down 11.3% after it priced $725 million of
second lien secured term loans and has entered into a series of
exchange agreements with holders of its convertible senior notes
and preferred stock. The second lien facilities will be comprised
of $500 million of A1 loans, and $225 million of A2 loans, each of
which will bear interest at a rate of LIBOR + 10% and will mature
on July 2, 2018. Proceeds from the second lien facilities will be
used to repay the companys existing second lien credit facility
and for general corporate purposes. In the exchange transactions,
SunEdison has agreed to issue $225 million of new senior secured
convertible notes due 2018 and to issue an estimated 28 million
shares of common stock.


Dow Jones US Energy Fund (IYE) was down 2% while Energy Select
Sector SPDR (XLE) was down 2.6% in the pre-market session.

Crescent Point Energy (CPG) was down 4.9% after the Canada-based
oil and gas company said it expects lower fiscal 2016 capital
expenditures compared to FY2015. Specifically, Crescent said it
expects to spend between $950 million and $1.3 billion in fiscal
2016, and aims an annual average production of 165,000 barrels of
oil equivalent per day (boe/d) to 172,000 boe/d. In Jan. 2015, the
company forecasted FY15 capital expenditures of $1.45 billion with
an average daily production of 152,500 boe/d.


Crude was down 2.5%. United States Oil Fund (

) was down 3.7%. Natural gas futures were up 1.7%. United States
Natural Gas Fund (UNG) was up 1.2%. Gold was up 1% and SPDR Gold
Trust (GLD) was up 0.8%. Silver was up 0.51% and iShares Silver
Trust (SLV) was up 0.5%.


Consumer Staples Select Sector SPDR (XLP) was down 1.8% while
other consumer staples funds iShares Dow Jones US Consumer Goods
(IYK) and Vanguard Consumer Staples ETF (VDC) were inactive.

Consumer Discretionary SPDR (XLY) was down 2.5%; meanwhile, SPDR
Samp;P Retail (XRT) was up 0.5% while other retail funds
PowerShares Dynamic Retail (PMR) and Market Vectors Retail ETF
(RTH) were flat.

The Finish Line (FINL) was down 17.3% after reporting Q3
non-GAAP earnings were a loss of $0.49 compared with a loss of
$0.02 a year earlier. Analysts had expected a loss of $0.03,
according to Capital IQ. Consolidated net sales were $382.1
million, a decrease of 3.5% over the prior year period and below
estimates for $408.1 million. Finish Line comparable store sales
decreased 5.8%.

For the fiscal year ending February 27, 2016, the company now
expects Finish Line comparable store sales to be up low-single
digits and non-GAAP diluted earnings per share between $1.18 and
$1.23. Analysts are looking for $1.74. For Q4, it sees comparable
store sales to be up in the low-single to mid-single digit range
and non-GAAP diluted earnings per share between $0.78 and $0.83,
below forecasts for $0.91.

The board of directors announced Thursday that Sam Sato will
succeed Glenn Lyon as CEO effective February 28, 2016. The board
also said it will pay a quarterly cash dividend of $0.10 per share
of outstanding common stock. This represents a $0.01 per share, or
11%, increase. The quarterly cash dividend will be payable on March
14, 2016 to shareholders of record as of February 26, 2016.

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It’s All Bad News for Markets Buckling Under China, Fed (1)

Over three days, more than $2 trillion has been wiped from the value of global equities, volatility in the broadest stock gauges has jumped 13 percent or more, and 8 percent was shed from the price of oil. Almost everything — from junk bonds to cocoa and coffee — has tumbled.

The rout deepened on Thursday, with Chinas Shanghai Composite Index plunging another 7 percent, taking its annual loss to almost 12 percent. The Stoxx Europe 600 Index dropped more than 3 percent by 10:03 am in London, with Germanys DAX Index heading for its biggest weekly plunge since August 2011. Futures on the Standard amp;amp; Poors 500 Index declined 2.3 percent.

As has been true before, the proximate cause is China. Data showing weakness in manufacturing this week sparked a tumble in the CSI 300 Index. Markets were roiled as the nations central bank cut its reference rate for an eighth straight day and said foreign-exchange reserves shrank by a record in December, fueling concern over the strength of the worlds second-largest economy.

China was one of the culprits when markets buckled in August, a time when the Federal Reserve had yet to begin tightening and expectations for global growth in 2016 were much higher than they are now. Another was stress in credit markets. Could the two be related?

Among the scarier scenarios laid out in August was that a drawdown of foreign-exchange reserves by central banks would starve markets of liquidity, a process sometimes called quantitative tightening. Central banks paring reserves to combat an exit of capital or manage currencies means less money in the financial system as cash is plowed into local-currency assets.

Chinas defense of the yuan following the Aug. 11 devaluation contributed to the first-ever annual decline in the nations foreign-exchange reserves. Likewise the end of the quantitative easing in October 2014, the Feds five-year bond purchase program, removed one of the biggest buyers from US bond markets.

Thats contributed to a rise in corporate-bond yields and a strengthening of the dollar. Higher borrowing costs will crimp profitability, expansion plans and buybacks, according to Michael Shaoul of Marketfield Asset Management.

Corporate earnings have become dependent on credit issuance and credit issuance is getting more difficult and more expensive, Shaoul, chief executive officer of Marketfield in New York, said by phone. I dont think there is much argument out there why wider credit spreads would lead to pressure on corporate earnings and a lower equity market. Weve all been through enough bad credit cycles to understand how they play out.

The yield premium on investment-grade debt has widened 26 basis points to 173 basis points over the past six months, hovering near a three-year high, according to Bank of America Merrill Lynch index data. In junk bonds, spreads have expanded by more than 200 basis points to 711, reaching levels not seen since the European sovereign credit crisis in 2011.

Chinas travails as well as contractions from Brazil to Russia are also muting expectations for global growth. The Washington-based World Bank lowered its forecast for 2016 economic expansion to 2.9 percent, from a 3.3 percent projection in June, according to its bi-annual Global Economic Prospects report released Wednesday.

And for the first time since the early 1990s, central banks around the world are pursuing divergent monetary policy, with the Fed raising its benchmark rate and the Bank of England considering doing the same. While stimulus is still flowing from the European Central Bank and Bank of Japan, its less than investors had wanted.

Geopolitical risks are escalating with North Korea conducting a nuclear test, tension growing between Saudi Arabia and Iran, and Britain threatening to leave the European Union.

Citigroup cut its view on American equities to underweight Tuesday as they see better opportunities in Europe and Japan. RBCs Jonathan Golub trimmed his estimate for the Samp;amp;P 500 in 2016 last month, citing the impact of oils plunge on profits for companies in the gauge.

Byron Wien of Blackstone Group predicted another down year in the Samp;amp;P 500 this week, citing peak earnings hurt by margin pressure and a contraction in share-price multiples, which at 23 times reported earnings are 30 percent above the average since 1936. His forecast for 2015 proved too optimistic as the index slipped 0.7 percent.

The seven-year rally is losing speed as earnings sink into the worst decline since the global financial crisis and valuations exceed levels at the end of nine of the past 10 bull markets. Analysts see profits for Samp;amp;P 500 companies dropping 6.1 percent in the fourth quarter just one week before the start of the earnings season.

People can name more concerns, said David Pearl, co-chief investment officer who helps oversee $43 billion at Epoch Investment Partners Inc. in New York. We have more negative news than positive, all valid. The market is just crazed every day about something.

Wang reported from New York.

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Where to Get Startup Business Loans For Bad Credit

Money is a big worry when you’re starting a small business. It’s an even bigger headache when you have bad credit.

With the growth of alternative lending, established businesses with bad credit have options for small-business loans. Startups with poor credit, however, face higher hurdles to financing. But loans are attainable if you know where to look.

Here are six financing options for startup business loans for bad credit.

1. Microloans and loans from nonprofits

Microlenders and nonprofit lenders are two of your best financing options if you have bad credit and are looking for small-business startup loans. Generally, you’ll get solid loan terms from these lenders, making it possible for you to grow your business and establish better credit.

Many microlenders and nonprofit lenders are also focused on helping minority or traditionally disadvantaged small-business owners, as well as small businesses in communities that are struggling economically. And these organizations are willing to work with aspiring entrepreneurs with poor credit.

The US Small Business Administration also has a microloan program that offers loans of up to $50,000 to small businesses and some not-for-profit childcare centers. The average SBA microloan is about $13,000. Here is a list of providers.

2. Friends and family

Perhaps the most common way of financing a new small business is to borrow money from friends or family. Of course, if your credit is bad — and your family and friends know it — you’ll have to persuade would-be lenders that you’ll be able to pay them back.

In these situations, the potential cost of failure is not just financial but also personal.

“Business is personal regardless of what people say,” David Nilssen, CEO of small-business financing company Guidant Financial, tells NerdWallet. “For most people, it’d be difficult to separate the two.”

Trim your list of friends and family to just those who understand your plans, and do your best to make certain they are comfortable with the risks involved.

3. Credit cards

Many small-business owners use a credit card to start a small business. Having bad credit doesn’t preclude getting one, although your choices may be limited to secured credit cards.

It’s important to remember, however, that credit cards are an expensive way of financing a small business if you have bad credit. That’s because card issuers determine annual percentage rates based largely on your personal credit score. It’s OK to use them to get started, especially if your credit is not good enough for a bank loan or other forms of financing. But research has shown that small businesses that rely too heavily on credit card financing typically fail.

Shop smart for the best credit cards

Compare all business credit cards
4. Personal loans

Many new small-business owners also access financing through personal loans, especially through a growing number of online lenders. But like credit cards, personal loans usually have high APRs, especially for bad credit borrowers.

For example, you could get a personal loan that could be used for starting a business from companies such as Peerform and Vouch. Both lenders have a minimum credit score requirement of 600, but their loans have APRs as high as 30%.

Nilssen says small-business owners should consider personal loans “an option of last resort.”

“Where they can work,” he says, “is when a business just needs a small amount of money for things like vehicle wraps, early stage production or buying equipment.”

5. Crowdfunding

Crowdfunding has become a popular method of raising funds to start a small business, thanks to such sites as Kickstarter and Indiegogo, which let you launch online campaigns to solicit funds. Instead of paying back your donors, you give them gifts, which is why this system is also called rewards crowdfunding.

New avenues are also opening up for equity crowdfunding, in which you tap a public pool of investors who agree to finance your small business in exchange for equity ownership. This became an even broader option recently with new securities regulations that allowed small-business owners to reach out to mom-and-pop investors, not just accredited investors.

Crowdfunding is good for the entrepreneur “who has a product and wants to test the market and validate the opportunity,” Nilssen says. “No credit necessary.”

6. Grants

Grants from private foundations and government agencies are also a way to raise startup funds for your small business. They’re not always easy to get, but free capital may be worth the hard work for some new businesses.

For example, if you served in the US Armed Forces, you can access small business grants for veterans. There are also small business grants for women.

Find and compare small-business loans

NerdWallet’s interactive small-business loans tool allows you to find financing that meets your individual goals. Sort by the age of your business, your credit score and the amount of money you need. Lenders were chosen based on factors including trustworthiness and user experience.

Compare business loans

Benjamin Pimentel is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @benpimentel

Image via iStock.

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SA Home Prices Rose in 2015, But Loan Restrictions Easing

While home prices in many neighbors may increase again in 2016, Mark Dotzour, the former chief economist for the Real Estate Center at Texas Aamp;M, says an easing in credit restrictions is making it easier for some middle-income buyers to get a loan.

Dotzour believes federal regulators overreacted following 2008, when lenders made too many loans to buyers with bad credit for homes they couldn’t afford.  Buyers defaulted and the housing market collapsed.

In response, lenders required many buyers to have spotless credit and pony up 20 percent of the home price as a down payment.  For a $200,000 house a buyer often had to put down $40,000 dollars cash.

Dotzour says the pendulum is now swinging back.

“In about May of 2013 the federal government decided they had ruined the housing market and decided they should do something about it,” he said.” 

“So, Fannie Mae , Freddie Mac and FHA are making it easier for people to get homes with smaller down payments. It’s about time,” added Dotzour.

Dotzour says now buyers can get a loan if they have a down payment of 3 percent and respectable credit.

“If you have a job and decent credit and a 3 percent down payment you should be able to buy a house in the United States.”

Dotzour says it’s not a return to the days of subprime lending that resulted in an avalanche of loan defaults.  He believes it’s a needed correction that will allow more middle income earners to have the American dream

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