You’ve wanted to open a business for some time, but you worry that you won’t be able to get the capital you want. You’re worried because of your past run-in with debt and bankruptcy.
You paid back your debts through a Chapter 13 bankruptcy, which required you to pay a single lump sum each month for five years. You completed the bankruptcy and emerged free of debt. The trouble now is that you want to open a business, but even with savings, it’s not enough.
Can you get a business loan if you’ve been through bankruptcy?
It’s possible. In many cases, business owners do go through bankruptcy and fail in their attempts to be successful only to get loans and start again. One of the major factors is your credit score. If you have a credit score of 640 or higher, then you may be able to get a business loan. It’s usually better to have credit scores of 680 or higher, but as long as you have average or good credit, there are probably business loan options for you.
Other times, your lender may just want to know that your bankruptcy has concluded and that you’re back on track. If the discharge has occurred, then it should be listed on your credit report. A lender may be willing to work with you if you can show a solid business plan and that you’ve been successful in your previous Chapter 13 bankruptcy’s payoff. If the Chapter 13 bankruptcy is old enough, it may not even affect your chances any longer. They usually stay on your record for up to 10 years, but after that, you’ll have a clean slate.