A bankruptcy filing in Arkansas or elsewhere does not necessarily foreclose the filer from obtaining business financing within a few years of the bankruptcy discharge. You can erase a large amount of debt in a bankruptcy and still be qualified for a small business loan under certain circumstances. Thus, if you keep a clear credit record after the bankruptcy and present a well-supported business plan, along with the existence of some collateral, a loan will have a fair likelihood of being approved.
You may have to shop for lenders in order to find those who are amenable to extending credit to those with a bankruptcy and who have loan policies that reflect a progressive lending policy. Additionally, it is reported that the SBA will issue a loan guarantee in some cases where there has been a bankruptcy in the past. However, you must be meticulous in paying your post-bankruptcy obligations on time and even before time if possible.
The steady up-to-date post-bankruptcy record of payments shows a lender that there has been a solid commitment to pay one’s obligations and to live by a new financial paradigm. That will be highly reassuring to both the lender and the SBA. Of course, a good record must go hand-in-hand with a smart and solidly-planned business idea that carries a realistic promise of success. In most cases, the small business will have a track record prior to the loan application, so that the way the company has grown in a progressively forward direction will be impressive.
A small business owner in Arkansas can look forward to building a credit-worthy business reputation after completing a personal consumer bankruptcy. This will be accomplished pursuant to strict adherence to good business procedures, accurate records, a strong business plan, and a solid track record of paying all post-bankruptcy bills on time. Credit reporting laws merely provide guideposts for future lenders, but they are not monumental or insurmountable brick walls.
Source: theworldlink.com, “Down to Business: Bankruptcy isn’t a bar to business borrowing“, Arlene Soto, Oct. 17, 2014