Getting a business loan in California can be complicated for those who have filed for bankruptcy in the past. This is generally true whether a person filed for a liquidation or reorganization bankruptcy. However, it is usually easier to get financing the farther removed from the event a person is when asking for a loan. It is important to know that a business owner’s personal credit score may not come into play.

If a company has an established credit history, a lender may be willing to use that as a basis to approve a loan. Therefore, it may be a good idea to work on building the company’s financial track record prior to submitting a loan application. It is also possible to get money to run a business without having to rely on a bank loan.

For example, a business owner may ask customers, friends or family members to put up cash that can be used for a variety of purposes. Microloan providers such as Kiva will let people borrow small sums of money without the need to submit to a credit check. A company can sell an equity stake in the business to an angel investor or anyone else who may be willing to help it succeed.

Filing for bankruptcy may be an ideal way to get a handle on existing debt. However, it can also negatively impact a person’s credit score, which may make it harder to get a loan. A bankruptcy may stay on a credit report for up to 10 years. Legal counsel may explain these and other consequences of filing for bankruptcy, and a legal professional may also explain the benefits of bankruptcy. Those benefits may include an automatic stay of creditor collection activities.