As previously discussed, there are ways for a Tennessee business owner to create a new business after going through bankruptcy, including starting a small business that does not require a lot of capital, or by seeking alternative means of financing. Even so, going bankrupt does not shut the door on going to traditional lenders to seek loans for your new business. There are some possibilities that a bank or a credit union might look past your bankruptcy and provide you with some financing.
Per Nerdwallet, while a bankruptcy report will stay on your record for seven years, you do not have to wait until then to approach a lender. It is true having bankruptcy on your record makes it more likely that a lender will reject your loan application, but not all lenders will make you wait the full seven years until your record is clean. There are lenders that set their own time periods for considering loan approvals from bankruptcy filers, with some lenders only needing you to wait three, two, or even just one year after your bankruptcy is completed.
Lenders may also consider the circumstances of your bankruptcy during the loan approval process. If you owned a previous company that went bankrupt due to an economic upheaval, a lender may be more understanding about your situation. You might also explain why you went bankrupt and how you handled it, as some lenders will factor in how a person dealt with bankruptcy, not just the fact that the person went bankrupt.
Credit.com points out that some lenders offer programs to people whose credit has been adversely affected by bankruptcy. You might find a credit union or a bank that provides a credit-builder loan. With a credit-builder loan, the money you borrow goes into a saving account or a CD. After a period of making regular payments each month, you can then access the money in the account. Some lenders will let you use your existing funds in a savings account or CD to secure a loan. You will regain access to your money once the loan is paid.
The bottom line is that there are options available for individuals to find financing from traditional lenders for a small business post-bankruptcy. Still, the more time you wait since your bankruptcy means there will be more financing options open to you.