Connect with us

Bad Credit

Best Business Loans for Bad Credit in 2020 (with Easy Qualification) ✅

Published

on

All reviews, research, news and assessments of any kind on The Tokenist are compiled using a strict editorial review process by our editorial team. Neither our writers nor our editors receive direct compensation of any kind to publish information on TheTokenist.io. Our company, Tokenist Media LLC, is community supported and may receive a small commission when you purchase products or services through links on our website. Click here for a full list of our partners and an in-depth explanation on how we get paid.

When the economy takes a dive, businesses take a dive with it. That’s why many companies, especially small family enterprises, take out business loans to stay afloat.

If your business needs extra funding, this is a great time as any to solve that issue with a loan. Interest rates are at an all-time low and some government programs even provide free money for small businesses – although these programs are inefficient and often riddled with scams.

But what happens if you couldn’t get that free federal money, and your bank doesn’t like your credit score? Is that the end? Of course not!

We’re way past the point where we need to rely on banks and the government for funding. Numerous online lenders provide cheap loans quicker than big banks – and more importantly, these alternative lenders do not require high credit scores.

As long as you’re in the 530+ area, you’ll find plenty of offers. In some instances, these lenders don’t even look at credit scores – your business’ performance and cash flow are all that matters. 

So, if you have bad credit and need a loan, you just need to find the right one. This is why we’ve made a list of the best online lenders for companies with low credit scores.

Ready? Let’s see what the top of the online lending industry has on the menu today.

Top Business Loans for Bad Credit


Our pick of the best business loans for low credit:

1. Kabbage
Best Overall
2. Funding Circle
Best for Long Repayment Terms
3. BlueVine
Best for Quick Funding
4. Fundbox
Best for Low Requirements
5. OnDeck
Big Loans with Low Requirements

Best Business Loans for Bad Credit

1. Kabbage – Best Overall

Kabbage Logo

Pros

  • No credit score requirement
  • Near-instant approval for loans under $150,000
  • No APR
  • Loans start at a mere $500

Cons

  • Pricing doesn’t incentivize stretched-out payment
  • At least 1 year of business is required to get approved
  • The longest repayment term is 18 months

If you need quick funding and your low credit has got you in a pickle, you will probably love Kabbage. As one of the biggest online lending platforms, Kabbage has given out more than $6.5 billion in loans ranging from as little as $500 to $250,000.

Even if you have a very low FICO, you still might find a good loan here. This is because Kabbage won’t measure your creditworthiness solely on your credit score. Rather, the company will look at your business’ performance – you will get the money if your company has good cash flow and performance.

Your business must have annual revenue of at least $50,000 and there is no collateral, but you have to guarantee the debt personally. There is no origination fee, which makes these loans more accessible and the payment terms can be anywhere between 6 and 18 months.

There’s no APR for Kabbage’s loans – instead, you need to pay a fee that equals 1.5% – 10% of the amount you owe every month you’re still in debt. This means you pay your principal every month plus the aforementioned fee. This means that the quicker you pay off the debt, the less you have to pay.

If you meet the requirements and your desired loan is under $150,000, it will likely get approved in minutes. However,  debt requests larger than $150,000 are vetted manually and usually take up to one week to go through.  


2. Funding Circle – Best for Long Repayment Terms

Funding Circle Logo Banner

Pros

  • No minimum revenue requirement
  • Longest loan term is 5 years
  • Low interest rates for clients who qualify

Cons

  • Relatively high minimum loan
  • 620 FICO requirement
  • Loan disbursement can take as much as 10 days

Some businesses need big loans and big loans often require long payment terms. Funding Circle provides just that – business loans here range from $25,000 to a whopping $500,000 and the repayment terms can be as long as 5 years.

The requirements here are a bit stricter, though – you need a 620+ credit score and at least 2 years in business to get a loan from Funding Circle. Also, all owners need to sign a lien on company assets and give a personal guarantee that their company will respect the terms of the loan.

There is no minimum company revenue requirement and the lowest APR is very competitive at 4.99%. You will need a higher FICO than 620 to get the lowest APR but whatever loan you get, you will need to wait up to 10 days until your application is approved and the money transferred to your bank account. 

This waiting time is slightly longer than average but it is not the only drawback – clients need to pay a 3.49% – 6.99% origination fee which you can avoid completely with some other lenders. This means you need to pay a percentage of your loan upfront just to get your funds.

All in all, Funding Circle can get you where you need to be if you’re looking for a bit more substantial business loan. The 620 FICO requirement isn’t the lowest but you can have as much as 5 years to pay your loan off and the interest rates at Funding Circle are among the lowest you’ll come across today.


3. BlueVine – Best for Quick Funding

BlueVine Logo

Pros

  • Funding in less than 24 hours
  • Credit requirement is only 530
  • Business only needs to be 3 months old

Cons

  • APRs are not the lowest
  • Inflexible payment terms (6 – 12 months)

Those in need of quick funding need a quick lender – and therein lies BlueVine’s bread and butter. The approvals here usually take up to five minutes, and if everything checks out, you will get money for your company in 24 hours or less. 

BlueVine won’t test your patience and getting approved is pretty easy to boot. The minimum required credit score is 530, but your business needs to be at least 3 months old and have $120,000 or more in annual revenue to qualify. This makes BlueVine better suited for companies that have an established revenue stream rather than brand-new enterprises.

Loans at BlueVine range from $5,000 to $250,000 and APRs can be anywhere between 15% and 78%. Since payment terms are always between 6 and 12 months, paying off BlueVine’s loans is a bit more difficult compared to other loans on this list.

However, the expenses are clean – there are no origination and prepayment fees, so you can get rid of your debt earlier with zero penalties. BlueVine also offers invoice factoring ranging from $5 thousand to $5 million with 1 to 12-week payment terms. 

In summary, BlueVine is super-quick and doesn’t require that much in terms of credit, company age, and revenue – but has an APR that’s a bit higher than other low-credit loans. This is why BlueVine is great for businesses with a healthy cash flow that need funding ASAP.


4. Fundbox – Best for Low Requirements

Fundbox logo Banner

Pros

  • Low minimum credit score of 500
  • Very low requirements all-around
  • Minimum loan is only $1,000
  • Funding only takes a couple of days

Cons

  • Repayment terms up to 24 weeks
  • Maximum loan is only $100,000

You don’t need a huge credit score and company revenue to get a business loan, especially when it comes to Fundbox. Your business must be at least 2 months old and have $50,000 or more in revenue – very accessible compared to most other business loans.

Moreover, Fundbox doesn’t require much in terms of patience. Applications get approved in minutes, and you can usually expect funding within the next couple of days.

The loans at Fundbox range from $1,000 to $100,000, which is limited but great for borrowers who don’t need a huge money injection for their business. The repayment terms are only 12 to 24 weeks but since the maximum loan isn’t huge, making the payments on time is doable.

The APRs for term loans can be between 10% and 78%, based on how healthy your company’s financials look to Fundbox. These rates are not fantastic compared to the top personal loans for bad credit – but considering Fundbox’s low requirements and speed, the 10% APR is a great offer.

If you need speed, competitive interest rates, and easy access then Fundbox might be a perfect catch. On the other hand, you might want to look elsewhere if you want a business loan with long, stretched-out payments.


5. OnDeck – Big Loans with Low Requirements

OnDeck Logo Banner

Pros

  • Low credit score requirement
  • Quick lending
  • Highest loan is $500,000

Cons

  • Origination fee
  • Average interest rates

Your business doesn’t need a huge credit score to get a sizable loan. OnDeck only requires a 600 FICO so you can approach them for a loan as long as your business has been in operation for at least a year and has annual revenue of $100,000 or more.

OnDeck’s term loans range from $5,000 to $500,000 so you’re covered regardless of whether you need a little or a lot. Repayment terms can be anywhere from 3 months to 3 years – which is very handy if you intend to get rid of your debt quickly.

There is no prepayment fee for term loans but you need to start your relationship with OnDeck with a 2.5% to 4% origination fee. On the other hand, opening a line of credit doesn’t incur fees and you can borrow up to $100,000 from your account.

OnDeck approves loan requests within 24 hours and disburses funds in as little as 2 working days. This makes OnDeck very quick, but not quite as cheap as other similar lenders. The APRs range from 11.89% to 51%, which would be fantastic if the competition wasn’t even cheaper.

All in all, OnDeck doesn’t particularly stand out in any specific field but has a strong all-around offer and low credit score requirements. OnDeck has had a solid run as an online small business lender, as it has already satisfied over 100,000 clients with more than $10 billion given out in loans.


What Bad Credit Means

Bad credit means a low credit score. When it comes to business loans, anything in the low 600s and below is considered lower than average, e.g. “bad”. Companies with bad credit will have a harder time getting good, low-interest loans, and sometimes, getting a loan at all.

Bad Credit Score

Having bad credit is especially problematic if you want to borrow from a bank. Traditional banks heavily favor high credit scores and will not consider a low-credit company worthy of loans even if the company’s business performance is excellent. That is why companies and individuals with low credit scores are better off looking for alternative sources of funding.

💻 Want to raise your credit score? You can do so automatically. The top credit repair software can increase your credit with just a few clicks.

How Alternative Lending Works

Banks usually won’t even look at your business if your credit isn’t as high as they think it should be – but there are other lending options and they often come with benefits. The lenders we will mention here are all available online, so you don’t have to go anywhere or wait in a line to speak to a counselor.

Online lenders like the ones in the list above have certain advantages over traditional banks. For one, they are 100% accessible online and can review your loan applications in a matter of days, and sometimes, in a matter of minutes.

Also, due to their fully-digital approach, online lenders can process your information quickly and transfer your funds just a few days after your loan has been approved.

Online lenders are quicker than banks but that’s not their biggest advantage. Some modern lenders don’t rely on credit scores to determine who gets a loan.

Rather, they will inspect your company’s performance and financial history. This means that you can get a good loan as long as your business is in good health – which is how things ought to be.

If you don’t know where to find these online lenders and which one will get you the best deal, you can try a loan aggregator. A loan aggregator is an online marketplace where you can see all loan offers available to you and pick your favorite one. 

These platforms are handy as they will shorten and narrow-down your search for loans dramatically. If you’re looking for a small business loan and have a FICO of 550 or higher, you can take a look at the pros and cons of Fundera – a lending platform that specializes in providing great business loans.

How to Get a Business Loan With Bad Credit

Sure enough, getting a loan is a lot easier with a perfect FICO – but what should you do if your credit is on the low side? Actually, there are quite a few options to choose from if you have got bad credit. Here are a few things you know when looking for loans with low requirements.

1. Check Your Credit Profile

First of all, you need to know what you’re dealing with. You should take a look at your business’ credit report as well as your own. Knowing how to interpret your credit report is something you’ll need to get started.

This will tell you your credit score as well as what you can do to improve it. The 3 big credit bureaus Experian, TransUnion, and Equifax offer free annual credit reports on their websites and checking them out shouldn’t take much time.

2. Limit Your Search

To save yourself a lot of time, it’s good to only look at lenders that are likely to give you a loan. Banks usually don’t look at clients with credit scores below 680 when it comes to business loans, so it’s better to check out online lenders if you’re in the 530 – 680 area.

You can find merchant cash advances for scores above 500 online, but business loans and lines of credit have stricter requirements.

3. Microlenders Deserve Attention Too

Some non-profit lenders only deal in small loans. These loans have very low interest rates if any at all so they are an excellent choice if your business can make use of a small, cheap loan.

4. Cash Flow is the Priority

If you don’t pay your credit bills on time, the missed payments get recorded in your credit report and drive down your score for the years to come. So, before accepting a loan, see if your cash flow is solid enough to make good on your debt every month.

5. Improve Your Credit

If you just can’t find the perfect loan, improving your credit might be the only way forward. To do this you can pay off your debt very responsibly and on time, improving your score over time. But before you take on that long journey, you should remove negative items from your credit report – under the right circumstances, this can improve your credit more than any single action.

6. Check Out Government Loans

The COVID-19 crisis has been bad for our health, but also the wellbeing of our economy. That’s why Uncle Sam has stepped in to help businesses stay with their heads above the water in this unwelcoming environment. The government is offering free small business loans, like PPPs and other types of loans.

How to Get a Business Loan During COVID-19

The government has set up a huge pot of money that it is using to help small businesses and their employees get through these unstable times. PPP loans and EIDL loans have been very popular among business owners lately because they are either cheap or completely free.

That’s right, PPPs are completely free money – as long as you don’t cut your employee count and avoid lowering paychecks by more than 25%. 

Although PPPs are meant for small businesses, big companies were the first in line for the free federal money. Moreover, the big banks and the government haven’t done a perfect job giving out these loans – thousands of companies haven’t gotten PPPs they got approved for. 

This is mostly because traditional banks simply cannot process and approve so many loan requests. If you want to get your hands on a PPP loan quickly, your best bet is to work with a top online loan aggregator. Banks have already done damage to small businesses by delaying loan payments, so an online lending platform is a better choice.

Are PPP Loans Still Available? 

No. PPPs were terminated on August 8th and there have not been any efforts to revive the program yet.

However, there are a few alternative programs small businesses can turn to. These include Federal Disaster Loans, 7(a) SBA Loans, Main Street Lending Program, and Employee Retention Tax Credit.

Types of Small Business Loans for Bad Credit

Banks can be very strict when it comes to giving out business loans. Fortunately, there are many loan types you can get through alternate lenders, even if your FICO isn’t very high. Here are some of them:

  • Term Loans. This is your usual loan – you borrow X amount of money and pay it back with interest over time. These loans can be used to fund your company or eliminate its debt through the process of debt consolidation.
  • Business Credit Cards. A credit card like this is good for two reasons – you can borrow money whenever you need to, and paying your bills on time is great for building your credit score quickly. Business credit cards work the same way as regular credit cards but usually have higher interest rates. That’s why you should only use them for borrowing small amounts you can pay off quickly.
  • Short-Term Loans. These are similar to regular term loans, but they have to be paid back in full in 3 to 24 months. Instead of making monthly payments yourself, your bank will automatically withdraw a fixed amount from your balance every week or month.
  • Short-Term Lines of Credit. You can think of a short-term line of credit as a credit card you intend to use for buying inventory and paying your workers. 
  • Invoice Factoring. You can have a bank (or some other lender) pay your employees’ paychecks so that you can pay back the bank at a later date. Your lender will then take a percentage of your company’s income every month to settle the debt.
  • Equipment Financing Loans. You can take out a loan to buy equipment for your business and use this equipment as collateral for the loan – this collateral keeps the interest relatively low. Equipment dealers offer equipment financing loans but you can also try other online lending platforms.
  • Merchant Cash Advances. You can take out a short-term loan that you will repay by giving your lenders a percentage of your future sales until the debt has been paid in full. Bad credit isn’t a big deal with this type of loan – as long as your company’s performance is good, lenders will see this as a good opportunity and will likely give you a merchant cash advance.

🛠 Did you know: There are a number of credit repair companies you can leverage to repair your credit score. Sky Blue Credit Repair is one of them — and they come with a 90-day money back guarantee.

Small Business Loan Fees and Expenses

Repaying a business loan isn’t as simple as making monthly payments on your principal and interest. There are many other expenses that can unexpectedly creep up on you if you didn’t read the fine print in the contract you signed.

Here are all the terms you need to know to make sense of the pricing of business loans.

  • APR – The annual percentage rate is the interest rate plus all other expenses associated with it. Usually, having great credit means you will get loans with lower APRs.
  • Down payment – Some lenders may require you to deposit up to 25% of the loan amount as a down payment. The better your credit score, the less you’ll need to pay upfront since lenders use credit ratings to determine if you’re a risky client. The downpayment can also be in equity – e.g. your business’ property.
  • Factor rates – Merchant cash advances use factor rates, and not interest rates, to determine how much the borrower needs to pay the lender. For example, if a company takes out a merchant cash advance for $1,000 with a factor rate of 1.3, it will need to pay back its lender $1,300.
  • Origination fee – Some loans incur a processing fee you need to pay upfront – this is called the origination fee. The fee counts towards paying off your total debt, but you need to pay it before you even get funds from your loan.
  • Underwriting fee – Before a lender gives out a loan, they have to pay the underwriters to assess the risk of doing so. Underwriting fees cover this expense.
  • Closing fees – Closing a loan isn’t very straightforward from the bureaucratic perspective. Cutting the red tape will only incur a small fee but it’s worth mentioning either way.
  • Late payment/prepayment fees – Logically enough, if you are late with a payment, that will incur a late payment fee. However, paying before the due date can incur a fee too. These are not the very common, but beware of prepayment fees when you take out a loan.

Bad Credit Business Loan FAQs

What Credit Score Do You Need for a Business Loan?

Most banks and alternative lenders require a credit score of 600 for small business loans. However, there are many online lenders and loan aggregators that only require 550 or even less. In some cases, an online lender might not require a credit score at all – they just look at your company’s performance and give you the loan if your business has good, stable cash flow. 

Can I Get a Loan With a Credit Score of 500?

Banks don’t usually give out business loans to borrowers with credit around 500. Some online lenders offer loans for credit around 500 but the interest rates are always high in that credit score range.

Do Banks Give Loans to Startups?

Yes, but only if the startups can repay them. Banks don’t like risks, so they will ask for collateral of the same value as the loan. The collateral is usually the property of the startup or a personal guarantee from its owners.

What is a 504 Loan Program?

A, SBA 504 loan is a lending program that involves 3 parties – the borrower, who puts in 10% of the loan, as well as a bank and a CDC (Certified Development Company) that finance the remaining 90%. This loan can only be used for buying fixed assets like real estate and the maximum loan amount is $5 million.

What Do Banks Look for When Giving Business Loans?

They look for the 5 “Cs” of credit – character, collateral, capacity, conditions, and character. These will determine if you will get a good deal and if you will get a loan at all.

What Are the Five “Cs” of Credit?

  • Character – First, the bank will look at your credit score and credit history. The higher your score and the longer your history, the better.
  • Capacity – The banks compare your income to your existing debt. They will look at your info to see if you are able to take on a new loan.
  • Collateral – If you have assets that the bank can seize if you default on your loan, it will result in better loan terms.
  • Capital – Same thing – if you have enough cash saved up, the bank will give you a better deal.
  • Conditions – Finally, the bank will ask you what you intend to use the funds for, and your answer will sway their decision. If you want to use the funds for something that will likely be profitable, the bank will like it more.

How Can I Secure a Business Loan Without Collateral?

Most business loans don’t require collateral – just the borrower’s personal guarantee that the debt will be paid off in time. However, putting the company’s assets and cash up as collateral will likely result in better loan terms.

All reviews, research, news and assessments of any kind on The Tokenist are compiled using a strict editorial review process by our editorial team. Neither our writers nor our editors receive direct compensation of any kind to publish information on TheTokenist.io. Our company, Tokenist Media LLC, is community supported and may receive a small commission when you purchase products or services through links on our website. Click here for a full list of our partners and an in-depth explanation on how we get paid.

Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Bad Credit

Inside the Highly Profitable and Secretive World of Payday Lenders

Published

on

Illustration by Sarah Maxwell, Folio Art

When Bridget Davis got started in the family’s payday lending business in 1996, there was just one Check ’n Go store in Cincinnati. She says she did it all: customer service, banking duties, even painting walls.

The company had been established two years earlier by her husband, Jared Davis, and was growing rapidly. There were 100 Check ’n Go locations by 1997, when Jared and Bridget (née Byrne) married and traveled the country together looking for more locations to open storefront outlets. They launched another 400 stores in 1998, mostly in strip malls and abandoned gas stations in low-income minority neighborhoods where the payday lending target market abounds. Bridget drove the supply truck and helped select locations and design the store layouts.

But Jared soon fired his wife for committing what may be the ultimate sin in the payday lending business: She forgave a customer’s debt. “A young woman came to pay her $20 interest payment,” Bridget wrote in court documents last year during divorce proceedings from Jared. “I pulled her file, calculated that she had already paid $320 to date on a principle [sic] loan of $100. I told her she was paid in full. [Jared] fired me, stating, ‘We are here to make money, not help customers manage theirs. If you can’t do that, you can’t work here.’ ”

Photograph by Brittany Dexter

It’s a business philosophy that pays well, especially if you’re charging fees and interest rates of 400 percent that can more than triple the amount of the loan in just five months—the typical time most payday borrowers need to repay their debt, says the Pew Charitable Trusts, a nonprofit organization focused on public policy. Cincinnati-based Check ’n Go now operates more than 1,100 locations in 25 states as well as an internet lending service with 24/7 access from the comfort of your own home, according to its website. Since its founding, the company has conducted more than 50 million transactions.

What the website doesn’t say is that many, if not most, of those transactions were for small loans of $50 to $500 to working people trying to scrape by and pay their bills. In most states—including Ohio, until it reformed its payday lending laws in 2019—borrowers typically fork over more than one-third of their paycheck to meet the deadline for repayment, usually in two weeks. To help guarantee repayment, borrowers turn over access to their checking account or deposit a check with the lender. In states that don’t offer protection, customers go back again and again to borrow more money from the same payday lender, typically up to 10 times, driving themselves into a debt trap that can lead to bankruptcy.

Jared and Bridget Davis are embroiled in a nasty court battle related to his 2019 divorce filing in Hamilton County Domestic Relations Court. Thousands of pages of filings and 433 docket entries by April 26 offer the public a rare glimpse into the business operations of Check ’n Go, one of Cincinnati’s largest privately-owned companies, as well as personal lifestyles funded by payday lending.

The company cleared $77 million in profit in 2018, a figure that dipped the following year to $55 million, according to an audit by Deloitte. That drop in revenue may have something to do with the payday lending reform laws and interest rate caps passed recently in Ohio as well as a growing number of other states.


The day-to-day business transactions that provide such profit are a depressing window into how those who live on the edge of financial security are often stuck with few options for improving their situations. If a borrower doesn’t repay or refinance his or her original loan, a lender like Check ’n Go deposits the guarantee check and lets it bounce, causing the borrower to incur charges for the bounced check and eventually lose his or her checking account, says Nick DiNardo, an attorney for the Legal Aid Society of Greater Cincinnati. After two missed payments, payday lenders usually turn over the debt to a collection agency. If the collection agency fails to collect the full amount of the original loan as well as all fees and interest, it goes to court to garnish the borrower’s wages.

That devastating experience is all too familiar to Anthony Smith, a 60-year-old Wyoming resident who says he was laid off from several management positions over a 20-year period. He turned to payday lenders as his credit rating dropped and soon found himself caught in a debt trap that took him years to escape.

Two things happened in 2019, Smith says, that turned around his financial fortunes. First, he found a stable manufacturing job with the Formica Company locally, and then he took his mother’s advice and opened a credit union account. GE Credit Union not only gave him a reasonable loan to pay off his $2,500 debt but also issued him his first credit card in a decade. “I had been a member [of the credit union] for just two months, and I had a credit rating of 520. Can you imagine?” he says. Smith says he is now debt-free for the first time in 10 years.

Consumer advocates say Check ’n Go is one of the biggest payday lending operations in the nation. But knowing its exact ranking is difficult because most payday lending companies, including Check ’n Go and its parent company CNG Holdings, are privately held and reluctant to disclose their finances.

Brothers Jared and David Davis own the majority of the company’s privately held stock. David bought into the company in 1995, but CNG got its game-changing infusion of capital from the brothers’ father, Allen Davis, who retired as CEO of then-Provident Bank in 1998. Allen sold off $37 million in stock options and essentially became CNG’s bank and consultant.

By 2005, however, the sons were part of a public court battle against their father. Allen accused Jared and David of treating his millions in CNG stock as compensation instead of a transfer from his ex-wife (and the brothers’ mother), sticking him with a $13 million tax bill. In turn, the brothers accused Allen of putting his mistress and his yacht captain on the company payroll, taking $1.2 million in fees without board approval, and leading the company into ventures that lost Check ’n Go a lot of money. Several years of legal fighting later, the IRS was still demanding its $13 million. CNG officials did not respond to requests for comment for this story.

Jared and David split $22 million in profit from CNG in 2018 and, according to the Deloitte audit, CNG’s balance sheet showed another $42 million that could be split between the two brothers in 2019. Jared, however, elected not to receive his $21 million distribution “in order to create this artificial financial crisis and shelter millions of dollars from an equitable split between us,” according to Bridget’s divorce filing.

Worse, she claims, Jared said they would be responsible for paying taxes out of their personal accounts rather than from CNG’s company earnings, making her personally responsible for half of the $5.5 million in taxes for 2019. She believes it wasn’t happenstance that $5.5 million was wired to Jared’s private bank account in December of that same year. Bridget has refused to sign the joint tax return, and Jared filed a complaint with the court saying a late tax filing would cost them $1 million in penalties and missed tax opportunities.

“For the duration of our marriage and to the present, Jared has full and complete control of all money paid to us from various investments we have made in addition to our main source of income, CNG,” Bridget wrote in her motion. She suspects that Jared, without her knowledge or consent, plowed the money for their taxes and from other sources of income into Black Diamond Group, the fund that invests in the Agave & Rye restaurant chain. Beyond the original restaurant opened in Covington in 2018, “they have opened four other locations in one year,” she wrote, including Louisville and Lexington. (The ninth location opened in Hamilton this spring.) Agave & Rye’s website touts its Mexican fare as “a chef-inspired take on the standard taco, elevating this simple food into something epic!”

In his response, Jared wrote, “We have very limited regular sources of income.” He says he isn’t receiving any additional distributions from CNG, the couple’s primary source of income, “and this is not within my control. The company has declared that we would not make any further distributions in 2020 given economic circumstances. This decision is based on a formula and is not discretionary.” Agave & Rye helped produce $645,000 in income for Black Diamond in 2020 but has paid out $890,000 in loans, he says. Through August 31, 2020, he wrote, the couple’s “expenses have exceeded income from all sources.”


The divorce case filings start slinging mud when the couple accuses each other of breaking up their 22-year marriage and finding new partners. Jared claims Bridget began an affair during their marriage with Brian Duncan, a contractor she employed through her house flipping business. Bridget, he says, paid Duncan’s company $75,000 in 2018 as well as giving him a personal gift of $70,000 that same year. Jared says she also bought Duncan at least one car and purchased a house for him near hers on Shawnee Run Road for $289,000, then loaned money to Duncan. Jared says Duncan has been late in repaying the note.

While Bridget says Duncan has been drug-free for several years, he has a rap sheet with Hamilton County courts from 2000 to 2017 that runs five pages long. It lists a half-dozen counts of drug abuse and drug possession, including heroin and possession of illegal drug paraphernalia; assaulting a police officer; stealing a Taser from a police officer; criminal damaging while being treated at UC Health; more than a dozen speeding and traffic violations; a half-dozen counts of driving with a suspended license; receiving stolen property; twice fleeing and resisting arrest; three counts of theft; two counts of forgery; and one count for passing bad checks.

Bridget has fired back that Jared not only is hiding his money from her but spending it lavishly on vacations, resorts, and high-end restaurants with his new girlfriend, Susanne Warner. Bridget says Jared gifted Warner with $40,000 without Bridget’s knowledge, then declared it on their joint tax return as a “contribution.” Bridget’s court filings include photocopies of social media posts of Jared and Warner globetrotting from summer 2019 to summer 2020: vacation at Beaver Creek Village in Avon, Colorado; cocktails at High Cotton in Charleston, South Carolina, and dinner at Melvyn’s Restaurant and Lounge in Palm Springs, California; getaways at resorts in Nashville and at a lakefront rental on Norris Lake ($600 per night); in the Bahamas at a Musha Cay private residence ($57,000 per night), at South Beach in Miami, and at a private beach at Fisher Island; in Mexico at Cabo San Lucas; in the U.S. Virgin Islands at Magen’s Bay and on a private yacht ($4,500 per night); in California at Desert Hot Springs, the Ritz-Carlton in Rancho Mirage, and Montage at Laguna Beach; and in the Bahamas at South Cottage ($2,175 per night).

For her part, Bridget has gone through some of the top lawyers in town faster than President Trump during an impeachment—six in all, two of whom she’s sued for malpractice. She sent four binders of evidence to the Ohio Supreme Court, asking for the recusal of Hamilton County Judge Amy Searcy and claiming Searcy was biased because of campaign donations from Jared and his companies. Rather than deal with the list of questions sent to her by Chief Justice Maureen O’Connor, Searcy stepped down. Two other judges have since stepped into the fray, and in March Bridget filed for a change of venue outside of Hamilton County, arguing she can’t get a fair trial in her hometown. At press time, a trial date had been set for June 28 in Hamilton County.

The poor-mouthing in the divorce case has reached heights of comic absurdity. Jared claims he’s “illiquid” because he didn’t get his distribution from CNG in 2019. Bridget has received debt collection notices for the nearly $21,000 owed on her American Express card and a $735 bill from Jewish Hospital. There’s no sign yet that anyone is coming to repossess her Porsche, which according to her filings has a $5,000 monthly payment. Each party has received $25,000 a month in living expenses, an amount later reduced to $15,000 under a temporary legal agreement while the divorce case is being sorted out. Court filings show that Jared’s net worth is almost $206 million and Bridget’s is $22.5 million.


In the early 1990s, Allen Davis was raising eyebrows at Provident Bank (later bought by National City), and not only because of his very unbanker-like look of beard, ponytail, and casual golf wear. He was leading the company into questionable subprime home loans for people with bad credit and a frequent-shopper program for merchants, though the bank’s charter barred him from getting involved in full-blown predatory lending practices. With guidance and funding from his father, Jared, at age 26, launched Check ’n Go in 1994 and became a pioneer in the payday lending industry. Jared and his family saw there were millions of Americans who didn’t have checking or savings accounts (“unbanked”) or an adequate credit rating (“underbanked”) but still needed loans to meet their everyday expenses. What those potential customers did have was a steady paycheck.

Conventional banks share a big part of the blame for the nation’s army of unbanked borrowers by imposing checking account fees and onerous penalties for bounced checks. In 2019, the Federal Deposit Insurance Corporation estimated there were 7.1 million U.S. households without a checking or savings account.

The Davises launched Check ’n Go on the pretext that it would “fill the gap” for people who occasionally needed to borrow money in a hurry—a service for those who couldn’t get a loan any other way. But consumer advocates say the real business model for payday lending isn’t a service at all. The majority of the industry’s revenue comes from repeat business by customers trapped in debt, not from borrowers looking for a quick, one-time fix for their financial troubles.

Ohio’s payday lending lobbyists got a strong hold on the state legislature in the late 1990s, and by 2018 Democratic gubernatorial candidate Richard Cordray could rightfully claim in a campaign ad that “Ohio’s [payday lending] laws are now the worst in the nation. Things have gotten so bad that it is legal to charge 594 percent interest on loans.” His statement was based on a 2014 study by the Pew Charitable Trusts.

The frustration for consumer advocates was that Ohioans had been trying to reform those laws since 2008, when voters overwhelmingly approved a ballot initiative placing a 28 percent cap on the interest of payday loans. But—surprise!—lenders simply registered as mortgage brokers, which enabled them to charge unlimited fees.

The Davis family and five other payday lending companies controlled 90 percent of the market back then, an express gravy train ripping through the poorest communities in Ohio. The predatory feeding frenzy, especially in Ohio’s hard-hit Rust Belt communities, prompted a 2017 column at The Daily Beast titled, “America’s Worst Subprime Lender: Jared Davis vs. Allan Jones?” (Jones is founder and CEO of Tennessee-based Check Into Cash.) In 2016 and 2017, consumer advocates mustered their forces again, and this time they weren’t allowing for loopholes. The Pew Charitable Trusts joined efforts with bipartisan lawmakers and Ohioans for Payday Loan Reform, a statewide coalition of faith, business, local government, and nonprofit organizations. Consumer advocates found a legislative champion in State Rep. Kyle Koehler, a Republican from Springfield.

It no doubt helped reform efforts that former Ohio Speaker of the House Cliff Rosenberger resigned in spring 2018 amid an FBI investigation into his cozy relationship with payday lenders. Rosenberger had taken frequent overseas trips—to destinations including France, Italy, Israel, and China—in the company of payday lending lobbyists. In April 2019, Ohio’s new lending law took effect and, since then, has been called a national model for payday lending reform that balances protections for borrowers, profits for lenders, and access to credit for the poor, according to the Pew Charitable Trusts. New prices in Ohio are three to four times lower for payday loans than before the law. Borrowers now have up to three months to repay their loans with no more than 6 percent of their paycheck. Pew estimates that the cost of borrowing $400 for three months dropped from $450 to $109, saving Ohioans at least $75 million a year. And despite claims that the reforms would eliminate access to credit, lenders currently operate in communities across the state and online. “The bipartisan success shows that if you set fair rules and enforce them, lenders play by them and there’s widespread access to credit,” says Gabe Kravitz, a consumer finance officer at the Pew Charitable Trusts.

Other states like Virginia, Kansas, and Michigan are following Ohio’s lead, Kravitz says. Some states, such as Nebraska, have even capped annual interest on payday loans. As a result, Pew researchers have seen a reduction in the number of storefront lending op­erations across the country. Even better, Kravitz says, there’s no evidence that borrowers are turning instead to online payday lending operations.

Cincinnati is one of five cities chosen for a grant to replicate the success of Boston Builds Credit, an ambitious effort that city launched in 2017 to provide credit counseling in poor and minority communities by training specialists at existing social service agencies. The program also encourages consumer partnerships with credit unions, banks, and insurance companies to offer small, manageable loans that can help the unbanked and underbanked improve their credit ratings. “Right now, local organizations are all kind of working in silos on the problem in Cincinnati,” says Todd Moore of the nonprofit credit counseling agency Trinity Debt Relief. Moore, who applied for the Boston grant, says he’s looking for an agency like United Way or Strive Cincinnati to lead the effort here.

Anthony Smith is thankful that he’s escaped the downward spiral of his payday loans, especially during the pandemic’s economic turmoil. “I’m blessed for every day I can get paid and have a job during these difficult times, just to be able to pay my bills and meet my responsibilities,” he says. “I’ve always kept a job, but until now I’ve had crappy credit. That doesn’t mean I’m a bad guy.”

Can others worth millions of dollars say the same?

Inside the Highly Profitable and Secretive World of Payday Lenders Source link Inside the Highly Profitable and Secretive World of Payday Lenders



Source link

Continue Reading

Bad Credit

What’s Questionable Credit and Can I Get a Car Loan With It?

Published

on

Questionable’s definition means that something’s quality is up for debate. If a lender says that your credit score is questionable, it’s likely that they mean it’s poor, or at the very least, they’re hesitant to approve you for vehicle financing. Here’s what most lenders consider questionable credit, and what auto loan options you may have.

Questionable Credit and Auto Lenders

Many auto lenders may consider questionable credit as a borrower with a credit score below 660. The credit score tiers as sorted by Experian the national credit bureau, are:

  • Super prime: 850 to 781
  • Prime: 780 to 661
  • Nonprime: 660 to 601
  • Subprime: 600 to 501
  • Deep subprime: 500 to 300

The nonprime credit tiers and below is when you start to get into bad credit territory and may struggle to meet the credit score requirements of traditional auto lenders.

This is because lenders are looking at your creditworthiness – your perceived ability to repay loans based on the information in your credit reports. Besides your actual credit score, there may be situations where the items in your credit reports are what’s making a lender question whether you’re a good candidate for an auto loan. These can include:

  • A past or active bankruptcy
  • A past or recent vehicle repossession
  • Recent missed/late payments
  • High credit card balances
  • No credit history

There are ways to get into an auto loan with questionable credit. Your options can change depending on what’s making your credit history questionable, though.

Questionable Credit Auto Loans

If your credit score is less than stellar, it may be time to look at these two lending options:

  • What Is Questionable Credit and Can I Get a Car Loan With It?Subprime financing – Done through special finance dealerships by third-party subprime lenders. These lenders can often assist with many unique credit situations, provided you can meet their requirements. A great option for new borrowers with thin files, situational bad credit, or consumers with older negative marks.
  • In-house financing – May not require a credit check, and is done through buy here pay here (BHPH) dealers. Typically, your income and down payment amount are the most important parts of eligibility. Auto loans without a credit check may not allow for credit repair and may come with a higher-than-average interest rate.

Both of these car loan options are typically available to borrowers with credit challenges. However, if you have more recent, serious delinquencies on your credit reports, a BHPH dealer may be for you. Most traditional and subprime lenders typically don’t approve financing for borrowers with a dismissed bankruptcy, a repossession less than a year old, or borrowers with multiple, recent missed/late payments.

Requirements of Bad Credit Car Loans

In many cases, your income and down payment size are the biggest factors in your overall eligibility for bad credit auto loans. Expect to need:

  • 30 days of recent computer-generated check stubs to prove you have around $1,500 to $2,500 of monthly gross income. Borrowers without W-2 income may need two to three years of professionally prepared tax returns.
  • A down payment of at least $1,000 or 10% of the vehicle’s selling price. BHPH dealers may require up to 20% of the car’s selling price.
  • Proof of residency in the form of a recent utility bill in your name.
  • Proof of a working phone (no prepaid phones), proven with a recent phone bill in your name.
  • A list of five to eight personal references with name, phone number, and address.
  • Valid driver’s license with the correct address, can’t be revoked, expired, or suspended.

Depending on your individual situation, you may need fewer or more items to apply for a bad credit auto loan. However, preparing these documents before you head to a dealership can speed up the process!

Ready to Get on the Road?

With questionable credit, finding a dealership that’s able to assist you with an auto loan is easier said than done. Here at Auto Credit Express, we want to get that done for you with our coast-to-coast network of special finance dealerships.

Complete our free auto loan request form and we’ll get right to work looking for a dealer in your local area that can assist with many tough credit situations.

(function(d, s, id){ var js, fjs = d.getElementsByTagName(s)[0]; if (d.getElementById(id)) {return;} js = d.createElement(s); js.id = id; js.src = "http://connect.facebook.net/en_US/sdk/debug.js"; fjs.parentNode.insertBefore(js, fjs); }(document, 'script', 'facebook-jssdk'));

Source link

Continue Reading

Bad Credit

Entrepreneur Tae Lee Finds Her Fortune

Published

on

By Jasmine Shaw
For The Birmingham Times

Birmingham native Tae Lee had plans last year to visit the continent of Africa, the South American country of Columbia, and the U.S. state of Texas.

“I was going to stay in each place for like four to six weeks, and then COVID-19 happened,” she said. “So, I just was like, ‘You know what, I’m just gonna go to Mexico and stay for six months.’”

Once home from Playa Del Carmen, located on Mexico’s Yucatán Peninsula, the 33-year-old entrepreneur put the final touches on “Game of Fortune: Win in Wealth or Lose in Debt,” a financial literacy card game for ages 10 and up.

“We created ‘Game of Fortune’ because we realized there was a gap in learning the fundamentals of money,” said Lee. “We go through life not knowing anything about money and then—‘Bam!’—real life hits. Credit, debt, and bills come at us quick!”

Lee believes the game “gives players a glimpse of real life” by using everyday scenarios to teach them how to make wiser financial decisions without having to waste their own money.

“I feel like [financial literacy] can be learned in ways other than somebody standing up and preaching it to you over and over again,” she said. “You can learn it in ways that are considered fun, as well.”

Which is why “we want the schools to buy it, so we can give students a fun way to learn about financial literacy,” she added.

Lee, also called the “Money Maximizer,” is an international best-selling financial author, speaker, coach, and trainer who is known for her financial literacy books, including “Never Go Broke (NGB): An Entrepreneur’s Guide to Money and Freedom” and the “NGB Money Success Planner High School Edition.” The Birmingham-based financial guru focuses on creating diverse streams of income in the tax, real estate, insurance, and finance industries.

For Lee, it’s about building generational wealth, not debt.

Indispensable Lessons

Lee got her first glance at entrepreneurial life as a child watching her mother, Valeria Robinson, run her commercial cleaning company, V’s Cleaning. Robinson retired in 2019.

“My grandmother had a cleaning service, too,” said Lee. “So, even though I didn’t start out as an entrepreneur, watching my mom and grandma do it taught me a lot.”

Lee grew up in Birmingham and attended Riley Elementary School, Midfield Middle School, and Huffman High School. She then went on to Jacksonville State University, in Jacksonville, Alabama, where she earned bachelor’s degree in physical education. She struggled to find a career in her field and became overwhelmed by student loans.

“My credit and stuff didn’t get bad until after college,” she said. “I was going through school and taking money, but nobody told me, ‘Oh, you’re gonna have to pay all of this back.’”

Before embarking on her extensive career in money management, Lee had not learned the indispensable lessons that she now shares with clients.

“‘Don’t have bad credit.’ That’s all I learned,” she remembers. “Financial literacy just wasn’t taught much. I learned the majority of my lessons as I aged.”

In an effort to ward off collection calls and raise her credit score, Lee researched tactics to strategically eliminate her debt.

“I knew I had to pay bills on time, and I couldn’t be late with payments,” she said.

Lee eventually began helping friends revamp their finances and opened NGB Inc. in 2017 to share fun, educational methods to help her clients build solid financial foundations.

“People were always coming to me like, ‘How do I invest in this?’ and ‘How do I do that?’ So, I said to myself, ‘You know what, people should be paying to pick your brain.’”

Legacy Building

While Lee enjoyed watching her clients reach milestones, like buying a new car with cash or making their first stock market investment, she was also designing “Game of Fortune” to teach the value of legacy building.

“The game gives players the knowledge to build generational wealth, not generational debt,” she said. “It gives you a glimpse of life, money, and what can truly happen if you mismanage your coins.”

Using index cards to create her first “Game of Fortune” sample deck, Lee filled each card with pertinent terms related to debt elimination and credit and wealth building. She then called on a few friends to help her work through the kinks.

Three of her good friends—Barbara Bratton, Daña Brown, and Sha Cannon—were just a few of the people that gave feedback on the sample deck.

“From there I met with Brandon Brooks, [owner of the Birmingham-based Brooks Realty Investments LLC], and four other financial advisors to fine-tune the definitions and game logistics,” Lee said.

Though Lee was unable to land a job in physical education after graduating from college, she now sees her career with NGB Inc. as life’s unexpected opportunity to teach on her own terms.

“Bartending and waitressing taught me that working for someone else was not for me,” she replied. “In order to get the life I always wanted, I had to create my own business.”

In her entrepreneurial pursuits, Lee strives to be an open-minded leader who embraces the need for flexibility.

“COVID-19 has shown me that in entrepreneurship you have to maneuver,” she said. “When life changes, sometimes your business will, too. You may have to change the path, but your ending goal can be the same.”

“Game of Fortune: Win in Wealth or Lose in Debt” is available and sold only on the “Game of Fortune” website: gameoffortune.money. To learn more about Tae Lee and Never Go Broke Inc., visit taelee.money and nevergobroke.money or email [email protected]; you also can follow her on Facebook (https://www.facebook.com/nevergobrokeinc) and Instagram (@nevergobrokeinc).

Source link

Continue Reading

Trending