Finimpact
Updated on

Best Business Loans for Bad Credit

If you have a low personal or business credit score, you may be limited in the types of business loans you qualify for. However, there are lenders out there that can help meet your small business financing needs. Read on to see which companies offer the best business loans for bad credit.

loans for bad credit
Susan Guillory
Written by:Susan Guillory
Professional Intuitive Business Coach and Content Writer

Reviewed by: Sarah Brooks, Personal Finance Writer and Editor

Many or all of the products featured here are from our partners who compensate us. This may affect which companies we write about and where the company appears on a page. However, any analyses, or reviews expressed in this article are those of the author’s alone, and have not been approved or endorsed by any partner.

Before choosing a small business loan for bad credit, we first need to understand what constitutes “bad credit.” According to Experian, one of the top three credit bureaus, bad credit is anything below 670. However, many of the lenders our experts found, offer small business loans to those with FICO scores as low as 500.

Below are the top alternative lenders to help you find the best business loans for bad credit.

Our Top Picks Best Business Loans for Bad Credit

credibly
  • Simple application process
  • As soon as same day funding
  • Open to high-risk industries
Credit Score
Min. Credit Score 500+
Loan Amount
Loan Amount $5K-$400K
Loan Repayment
Loan Repayment 6-18 months
biz2credit review
  • Multiple loan types available
  • Funding in 48h
  • Soft credit pull
credit score
Min. Credit Score 600+
loan amount
Loan Amount $25K - $6M
loan repayment
Loan Repayment 12-36 months
bluevine
  • Quick and simple application
  • Funding up to $250K
  • Interest rates as low as 4.8%
Credit Score
Min. Credit Score 625+
Loan Amount
Loan Amount $5K-$250K
loan repayment
Loan Repayment 6-12 months

Best Business Loans for Bad Credit - Full Overview

Take a look at these best small business loans for bad credit.

1. Credibly - Best for a Wide Variety of Loan Options

Credibly offers several options for business financing, most of which have very low credit score requirements. Choose from term loans, equipment loans, merchant cash advances, lines of credit, SBA loans, and invoice factoring.

Some of these loans don’t use your credit scores at all to qualify you. For example, invoice factoring looks at the value of your accounts receivable to get you approved.

Pros
Many different types of loans available
Very low credit score requirements (as low as 500)
High-risk industries welcome
Cons
Loans use factor rate, which can be confusing
Other fees are charged
Some loans require daily or weekly payments

Credibly offers a wide range of financial products, each with their own features and criteria. When it comes to credit score requirements, Credibly has some of the lowest requirements on this list, with some of its loans requiring only a credit score of 500.

Working capital loans, merchant cash advances, and invoice factoring are available up to $400,000, and lines of credit cap out at $250,000.

The Bottom Line

If you haven’t been able to secure a small business loan due to your credit score, Credibly is absolutely worth looking into. They offer a variety of loan types along with a low credit score requirement for many of its loans.

Try Credibly

2. Biz2Credit - Best for High Loan Limits

Biz2Credit offers a wide variety of loans, including term loans with loan amounts up to $500,000 and working capital loans up to $2 million. For both of these loan products, the minimum credit score is just 575.

Biz2Credit also offers small businesses commercial real estate loans (CRE loans) up to $6 million, though your minimum credit score must be 660.

Pros
High loan limits, even without good credit
Loans can be used for a number of purposes
Fast turnaround on application
Cons
Interest rates are high, comparatively
May have other fees on top of interest

Biz2Credit offers three loan products:

  • Working capital loans: $25k - $2 million
  • Term loans: $25k - $500k
  • CRE loans: $250k - $6 million

While requirements do vary, each product will require your business to generate $250,000 or more in annual revenues. Working capital loans require you to be in business for at least six months; and both term loans and CRE loans require you to have been in business for 18 months or more.

The Bottom Line

If you need a large loan amount and have been turned down by other lenders due to poor credit, Biz2Credit is worth applying for.

Try Biz2Credit

3. Bluevine - Best for Easy Line of Credit Access

Bluevine’s specialty is a business line of credit. If you don’t want all your cash at once, a line of credit may be just what you need. It operates like that of a credit card, where you only draw on what you need and only pay interest on that amount. Bluevine’s credit requirements are lower than some lenders, making it easy to get a line of credit even if your score isn’t perfect.

Bluevine’s application is quick, and you may receive approval in as little as five minutes if you qualify. Once you request funds, you’ll have access to them within hours.

Pros
Fast application process
Qualifications other than credit scores
Access to revolving line of credit
Cons
625 minimum FICO score may be difficult for some
Rates may be higher than with other lenders
Short repayment period = higher monthly payments


Bluevine can provide up to $250,000 in a line of credit if you qualify, and rates can be as low as 4.8%. If your credit is on the loan end of the 625 requirement, though, you will be charged a higher rate. Loans are repaid over six or 12 months, with fixed weekly or monthly payments.

To qualify for a line of credit with Bluevine, you will need:

  • 625+ FICO score
  • 6+ months in business
  • $10,000+ in monthly revenue
  • A business that operates or is incorporated in an eligible U.S. state

The Bottom Line

Bluevine may be a great fit for those looking for a line of credit. With less strict requirements to qualify, even newer businesses that haven’t yet established their credit may be able to get the financing they need.

Try BlueVine

4. Fora Financial - Best for Merchant Cash Advances

Fora Financial offers two types of products: Short-term business loans and merchant cash advances. Both products have a minimum credit score of just 500.

A merchant cash advance allows you to pay back your loan with a portion of your credit and debit card sales. Because of this, there is no set timeline as to when you have to repay your loan. Loan amounts for merchant cash advances can be as high as $750,000, and your business can be funded within 72 hours of approval.

Pros
Easy application process
Funding within 72 hours of approval
High loan amounts
Early payoff discounts
Cons
High interest rates
Additional fees may be charged

fora financial

To qualify for a short-term loan or merchant cash advance with Fora Financial, borrowers must be in business for at least six months and have no open bankruptcies. For short-term loans, the business must show $12,000 per month in revenue. For merchant cash advances, you’ll need $5,000 minimum in monthly credit card transacti

The Bottom Line

Fora Financial offers flexible funding solutions to those with poor credit. With two product offerings and an easy, one-page application that won’t negatively affect your credit, Fora Financial is there to help meet your business needs.

5. Fundera - Best for Comparison Shopping

Fundera is your one-stop shop for getting the best bad credit loan for your small business. One easy application will give you access to term loans, SBA loans, lines of credit, and more. Since your application will state your credit score, you’ll only be connected to lenders that may be willing to work with you.

Pros
Access to top lending partners
Wide range of loans and loan terms
Funding advisor can guide you
Cons
Criteria to qualify not listed on site
Offered rates may be higher than published

Fundera partners with lenders like Chase, American Express, Paypal, OnDeck, Citibank, and others to find the best financing to meet your needs. They also give you access to a Funding Advisor who will guide you through the loan process.

Since Fundera partners with different lenders, the qualifications will vary. In general, though, Fundera recommends you have a minimum FICO score of 600 and have been in business for at least two years. The application process is simple. Loan funds are processed at different speeds, depending on the lender and the loan type. Short-term loans and lines of credit may be funded within a day, while medium-term loans can take three to seven days to fund.

The Bottom Line

With a simple application process and a Funding Advisor to help you along the way, applying for a small business loan through Fundera is an excellent choice for those not knowing exactly what they qualify for. If options are what you’re looking for, Fundera is the choice for you.

Try Fundera

6. OnDeck - Best for Being a Loyal Customer

If you foresee needing access to capital on an ongoing basis in the future, OnDeck may be able to help. Not only are the credit requirements fairly low, you can also benefit from being a loyal customer who borrows money over and over.

OnDeck offers both term loans and lines of credit up to $250,000. For customers who take out a second loan, OnDeck waives all the remaining interest on the first loan.

Pros
Perks for loyal customers
Low interest rate requirements
Same day funding as loan approval
Cons
High interest rates
Automatic daily or weekly repayment


OnDeck’s loans and lines of credit both require credit scores of 600, as well as a minimum length in business of two years. You’ll also need a business checking account and $250,000 in revenue in the past 12 months.

Interest rates start at a high 35%, but keep in mind you’ll pay these loans back over 24 months or less. If you pay the loan off early, you can have the remaining interest waived with no prepayment fee.

The Bottom Line

Very few online lenders offer rewards to returning customers. If you suspect your business will need future loans, OnDeck could be the right fit for you.

Try OnDeck

Best Business Loans for Bad Credit - Main Features

Company Min. Credit Score Min. Time in Business Min. Annual Revenue Loan Amount Interest Rate
BlueVine 625 6 months $120k Up to  $250k Starting at 4.8%
Biz2Credit 575 6 months $250k $25k to $6 million Starting at 7.99%
Credibly 500 6 months $50,000 Up to $400k Starting at 4.8%
Fora Financial 500 6 months $60,000 for merchant cash advance $5k to $750k Factor rate of 1.1-1.9
Fundera 600 2 years $150k Up to $5 million Varies
OnDeck 600 2 years $250k $5k - 250k Starting at 35%

How to Choose the Best Business Loans for Bad Credit?

If you have bad credit and are looking for a business loan, start by looking for lenders who are more lenient with their criteria to qualify. Some will consider your annual revenue or monthly sales numbers when reviewing your application, rather than relying solely on your credit scores.

How to build business credit in 8 simple steps >>

Our team of experts took into account the following factors when reviewing best business loans for bad credit:

  • Application process: While traditional lenders tend to have long and arduous application processes, alternative lenders often have much shorter ones. Our experts also found whether a soft or hard credit pull was done.
  • Interest rates and fees: While business loans for bad credit tend to have higher interest rates than traditional loans, that may be necessary to get the financing you need. Our experts looked at rates and any additional fees that may apply.
  • Qualification process: We reviewed the minimum credit score, annual revenue, and business history requirements to ensure you meet them.
  • Customer support: You will have a relationship with this lender for years, so we made sure the company is known for positive customer experience. How can you connect with a customer support rep? Chat? Phone? Email?
  • Online user reviews: We found out what others had to say about a lender by reading reviews on websites like Trustpilot.
  • Perks and bonuses: Lenders should work to get your business. What is this lender offering that makes it stand out? Some examples include payment flexibility, advertising transparency, and advanced technology.

What Is a Bad Credit Score?

Your credit score can directly impact your ability to get a good rate on a business loan.

The FICO Score, commonly used with loan applications, ranges from 300 to 850. Anything under 670 is considered a bad credit score. In that range, 580-669 is considered a fair score, while 300-579 is poor.

Types of Financing Available for Bad Credit

We’ve covered quite a range of financing options that may generally be available to you if you have bad credit. Here’s a brief recap.

  • Term loan: May be short (3-6 months) or long (3+ years).
  • Line of credit: Access the cash you need, pay it back, and borrow again.
  • Invoice factoring: Sell your outstanding invoices for a percent of the value.
  • Merchant cash advance: Get an advance on future sales.
  • Equipment financing: Leverage the value of the equipment you’re buying as collateral.
  • Commercial real estate loan: Use the value of the property as collateral.
  • While there are traditional lenders that offer most of these, they will have higher requirements for qualifying for them. Alternative lenders tend to be more relaxed in their requirements, but you will typically pay more in interest and fees.

    How to Get a Business Loan With Bad Credit?

    Let’s look at what you need to do to get a business loan with bad credit.

    Step 1: Check Your Credit Scores

    Before applying for a loan, check your credit scores. Some lenders will look at both personal and business credit, so if you have both (not every company has business credit scores or history), check them to see where you fall with your numbers.

    Step 2: Improve Your Credit Scores If You Can

    You might want to work on improving your credit scores before applying for financing. You can do this by paying down existing debt and making your loan payments on time each month. Over time, you may see your credit scores rise, which can help you qualify for better terms.

    Step 3: Decide How Much You Need

    Once you’re ready to start shopping for a loan, decide how much you want to borrow and what you’ll do with the money. Having a plan and budget can ensure that you maximize the money you borrow to help your business grow.

    Step 4: Find the Best Deal

    Next, shop around. Don’t necessarily take the first loan offer you get, since you might qualify for a lower rate elsewhere. Also, look beyond just the rate. You may want to work with a lender who will be there to answer your questions and guide you through the process, as well as one who is transparent about fees.

    Step 5: Apply for the Loan

    Once you’ve found the loans you qualify for, choose your top picks and apply. Each lender has a different application process and some may require more documents than others. Documentation may include tax returns, bank statements, business leases, and more.

    Step 6: Get Your Money

    Once your loan application has been approved, you could receive funds in as little as a few hours, depending on the lender. Use the funds wisely to grow your business!

    Where to Get a Business Loan with Bad Credit

    Generally, you won’t find a bank or credit union that will offer loans to businesses with bad credit. These financial institutions are picky about who they lend to because of the high risk involved. If you don’t pay back a loan, they lose money. Because these lenders are known for offering the lowest interest rates, they carefully vet who they lend to.

    What options do you have?

    There are alternative lenders who are willing to take the risk of lending to a business with bad credit, though they may charge more in interest and fees. These lenders will work with you based on other criteria, such as how long you’ve been in business, your monthly or annual revenues, and more.

    Taking out a loan with one of these lenders can also help you build your credit when you pay your bill on time each month. These payments may be reported to credit bureaus, which in turn will increase your score.

    Conclusion

    Even with bad credit, you may be able to qualify for a small business loan. Your business may need an injection of cash to keep it moving forward or to take it up a notch, and your credit scores shouldn’t keep you from making that happen.

    Frequently Asked Questions(FAQ)

    Can you get a small business loan with bad credit?

    It is possible to be approved for a small business loan if you have bad credit. Some alternative lenders look at other criteria to qualify you, including time in business and annual revenues. These lenders may, however, charge more in interest and fees than traditional lenders.

    What credit score do I need to get a business loan?

    The minimum credit score for a business loan will vary. Some lenders, though, may offer loans to businesses with credit scores as low as 500. It’s best to shop around to see which lenders you qualify for and what their rates are.

    What should I do if I’m denied a business loan because of my credit?

    It can be disheartening to be turned down for a loan, but don’t give up. You can apply for financing with one of the lenders covered here that have less stringent requirements. We also recommend working on improving your credit score by reducing your debt and making all of your monthly payments on time.

    Can you get a SBA loan with a bad credit score?

    Minimum credit scores are generally higher with SBA loans. If your score is in the mid-to-high 600s, though, you may very well be able to qualify for an SBA loan.

    Susan Guillory

    Written by: Susan Guillory

    Professional Intuitive Business Coach and Content Writer

    Susan Guillory is an intuitive business coach and content magic maker. She’s written several business books and has been published on sites including Forbes, AllBusiness, and SoFi. She writes about business and personal credit, financial strategies, loans, and credit cards.

    More about me
    Sarah Brooks

    Reviewed by: Sarah Brooks

    Personal Finance Writer and Editor

    Sarah Brooks is a personal finance writer and editor with more than 10 years of experience. She specializes in personal and business loans, mortgages, auto loans, and credit cards.

    More about me

    Related Loan Picks