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Best Business Loans for Bad Credit to Get on 2023

A poor credit score limits your loan options and can result in higher interest rates. Yet, it's not a dead-end. Many online lenders are ready to support the financial needs of your small business despite bad credit. Read on to see which companies offer the best bad credit business loans.

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

Reviewed by: Sarah Brooks, Personal Finance Writer and Editor

Fact Checked by: Dr. JeFreda R. Brown, Financial Expert

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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.

Best Overall
Lendzi logo
4.1

Lendzi - Best for Excellent Customer Reviews

4.1
Min. Annual Revenue
$180,000
Min. Time in Business
6 months
Min. Credit Score
None
Key Features
  • Borrow up to $400,000
  • Competitive starting rates on most products
  • Bad credit accepted
  • See your options without hurting your credit
  • Flexible terms: 3 to 15 months
  • Excellent customer reviews on independent review sites
Pros & Cons
  • Bad credit accepted on certain loan products
  • Excellent customer reviews
  • 75+ lenders in their network
  • Fast funding times
  • Flexible terms
  • Competitive rates
  • High annual income requirement on certain products
  • Multiple phone calls may be required during approval process
Overview

Lenders can sometimes have a bad reputation and be filled with customer complaints, but not Lendzi. Lendzi was founded in 2020 and has accumulated more than 2,000 5-star reviews since its inception on sites like TrustPilot, Google, and Better Business Bureau. Not only do past and current customers rave about them, but the lender also offers competitive rates, multiple loan products to choose from, and they are accepting of low credit scores.

 

Main Features

 

Lendzi offers small business owners seven different types of products. If you have poor credit, we suggest looking into a merchant cash advance, working capital loan, or equipment financing loan. For these products, the minimum credit score required varies between 500 and 550. If your credit is in the 600s, you may qualify for their other products, including short- and long-term business loans, a business line of credit, or an SBA loan. To qualify, you’ll need to have at least six months of business history and $180,000 in annual income.

Lendzi prides itself on working with small business owners who have either been denied a loan elsewhere or have less-than-ideal credit. They are a direct lender, but also partner with more than 75 other lenders, improving your chances of qualifying for a loan. If you qualify for many, you get to decide which lender you want to work with. Applying takes just a few minutes and will not impact your credit score.
Uncapped - Fast, flexible funding for your online business
4

Uncapped - Best for No Minimum Credit Score Requirements

4
Min. Monthly Revenue
$10,000
Min. Time in Business
6 months
Min. Credit Score
None
Key Features
  • Borrow up to $10 million
  • Fees as low as 2%
  • No minimum credit score
  • No personal guarantees required
  • Best for online businesses
Pros & Cons
  • Transparent fees with no hidden costs
  • No minimum credit score requirements
  • Doesn’t require personal guarantee
  • Revenue-based financing available
  • Amounts up to $10 million
  • Includes virtual cards and payment tools
  • Not available in some states
  • Not available to sole proprietors
  • Requires $10,000 in monthly revenue
Overview

Uncapped makes business lending decisions based on business information without personal guarantees. What’s more, there are no minimum credit score requirements, and if your business is having cash flow issues, revenue-based financing may be able to help. 

 

Main Features

 

Uncapped will lend anywhere from $10,000 to $10 million to fuel the growth of your small business. There are no application fees or prepayment penalties. You’ll pay a flat percentage of the loan amount, ranging from 2% to 12%, rather than a traditional interest rate. That is the only fee you have to worry about. 

Fixed-term loans are repaid in three to 24 months, whereas revenue-based financing comes out of your sales. You’ll pay 5% to 25% of your monthly revenue until the loan plus the fee is paid off. Uncapped doesn’t have a minimum credit score, but you will need six months in business and at least $10,000 in monthly revenue to qualify. Your business should also have an online model and process more than 40% of your payments online. 

Uncapped is a great option for businesses with bad credit, especially those with inconsistent monthly revenue. However, your business will need to earn $10,000 per month at a minimum to qualify.
bluevine
4

Bluevine - Best for Easy Line of Credit Access

4
Min. Monthly Revenue
$10,000+
Min. Time in Business
6 months
Min. Credit Score
625+
Key Features
  • Funding up to $250,000
  • Interest rates as low as 4.8%
  • Loan Repayment 6-12 months terms
  • Quick and simple application
Pros & Cons
  • Fast application process
  • Qualifications other than credit scores
  • Access to revolving line of credit
  • 625 minimum FICO score may be difficult for some
  • Rates may be higher than with other lenders
  • Short repayment period = higher monthly payments
Overview

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 you have less than perfect credit.

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.

Main Features

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

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.
biz2credit review
4

Biz2Credit - Best for High Loan Limits

4
Min. Annual Revenue
$250,000
Min. Time in Business
6 months
Min. Credit Score
575
Key Features
  • Borrow up to $2 million
  • Loan Repayment 12-36 months terms
  • Variable APR depending on the applicant
  • Multiple loan types available
  • Funding in 72 hours
  • Soft credit pull
Pros & Cons
  • High loan limits, even without good credit
  • Loans can be used for a number of purposes
  • Fast turnaround on application
  • Interest rates are high, comparatively
  • May have other fees on top of interest
Overview

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 personal credit score must be 660.

Main Features
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.

If you need a large loan amount and have been turned down by other lenders due to poor credit, Biz2Credit is worth applying for.
fundera
3.9

Fundera - Best for Comparison Shopping

3.9
Min. Annual Revenue
$150,000
Min. Time in Business
2 years
Min. Credit Score
600
Key Features
  • Connections to multiple lenders
  • Competitive rates
  • Soft credit check
Pros & Cons
  • Access to top lending partners
  • Wide range of loans and loan terms
  • Funding advisor can guide you
  • Criteria to qualify not listed on site
  • Offered rates may be higher than published
Overview

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.

 

Main Features


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 credit 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.

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.
fora financial logo reviewed on Finimpact.com
3.9

Fora Financial - Best for Merchant Cash Advances

3.9
Min. Monthly Revenue
$12,000
Min. Time in Business
6 months
Min. Credit Score
500
Key Features
  • Ideal for plenty of industries
  • Approval not solely credit based
  • Early payoff discounts
Pros & Cons
  • Easy application process
  • Funding within 72 hours of approval
  • High loan amounts
  • Early payoff discounts
  • High interest rates
  • Additional fees may be charged
Overview

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.

 

Main Features

 

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 transactions.

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.

In this review, our experts highlight the terms, rates, and fees of the best business loans for bad credit and explain what makes each lender a good option. We also share potential downsides of each lender and provide a rating methodology you can use to select the best option for your needs.

Many traditional lenders such as banks will turn down prospective borrowers with bad credit. Luckily, there are alternative business lenders that offer loans to borrowers with credit scores as low as 550. Those lenders consider your annual revenue or monthly sales numbers when reviewing your application, rather than relying solely on your personal or business credit scores.

A bad credit score is anything below 670. More specifically, a score between 580 and 669 is considered fair, and one between 300 and 579 is poor. Small Business Credit Survey data states that about 59% of small businesses are in fair or poor financial condition

 

How To Choose The 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 bad credit business loans 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

Among all small business borrowers, term-loans and lines of credit are the most commonly sought types of funding. More than 75% of borrowers applied for these financing products. 

Here’s a brief recap of your options:

While traditional lenders offer most of these, they will have higher qualification requirements. Alternative lenders tend to be more relaxed in their requirements, but you will typically pay more in interest and fees.

 

Pros and Cons of Bad Credit Business Loans

Pros

  • Can help struggling businesses overcome temporary setbacks
  • Provides an opportunity to build credit
  • Variety of choices, e.g. invoice factoring or equipment financing

Cons

  • Higher interest rates 
  • Potentially high fees
  • Time-in-business requirements may leave out startups

 

How to Get a Business Loan With Bad Credit

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

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 personal or business credit scores before applying for financing. Here are a few tips for boosting bad personal credit: 

  • Pay down existing debt
  • Make any loan payments on time
  • Avoid maxing out credit cards 
  • Don’t cancel older accounts–length of credit history is 15% of your FICO score
  • Check your credit reports for fraud and errors
  • Avoid credit repair scams

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 4: 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. You may be asked to provide some or all of the following documentation:

  • Business licenses
  • Business bank statements
  • Tax returns
  • Business plan 
  • Financial statements including your balance sheet, income statement, and cash flow
  • Commerical leases
  • Franchise agreements
  • Third-party contracts
  • Collateral 
  • Personal guarantee

Step 5: 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! You may improve your bad personal credit at the same time. 

 

Where to Get a Business Loan for Bad Credit 

Businesses with bad credit face a steeper road to loan approval. According to the Fed, only 8% of small businesses regarded as “high credit risk” received all of the funding they applied for. 

However, there are options:

  • Banks: Traditional banks are less likely to approve bad credit business loans. However, Fed data shows that large and small banks remain the most popular option for small businesses, regardless of credit profile. For example, 44% of low credit-risk SMBs applied for credit through large banks, while 43% of high credit-risk SMBs did the same. 
  • Community Development Financial Institutions: Designed to provide financing to borrowers who might otherwise struggle to get funding, CDFIs include banks, credit unions, and venture capital funds. Only 2% of borrowers apply to CDFIs, per the Fed. 
  • Credit unions: Credit unions are slightly more popular with high-risk borrowers than low-risk ones: 9% vs. 8%. This likely reflects their reputation as being slightly more flexible about credit standards than banks. 
  • Online lenders: Fintech companies are a more recent addition to the financial services space. Operating solely online, these lenders are more than twice as popular with high credit-risk SMBs than low credit-risk firms, according to the Fed. 

 

What Can You Do if You’re Denied a Small Business Loan Because of Bad Credit?

If your loan application is denied due to your credit profile, you still have options. Start by reviewing your application. Have you provided all the necessary documents–or would adding more information improve your chances? Consider reapplying with more thorough documentation. 

If that’s not an option, consider your alternatives to improve your cash flow including other lenders, alternative loan products like invoice financing or merchant cash advances, or borrowing from friends and family. 

 

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.

 

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.

Can you get startup business loans with bad credit?

Although traditional banks may turn you down, you may still qualify for a startup business loan with bad credit through an alternative lender. Some online lenders may consider startups, even if the founder has a poor credit profile. You might also seek financing through a Community Development Financial Institution. 

Can I get a business loan with a 500 credit score?

Some lenders will consider offering business loans to borrowers with a 500 credit score. Your chances of boosting your cash flow if you have a solid monthly revenue, at least six months to a year in business, and a good business plan. 

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
Dr. JeFreda R. Brown

Fact Checked by: Dr. JeFreda R. Brown

BA, CFEI and a highly respected expert in personal and business finance

Dr. JeFreda R. Brown is more than a financial consultant: she’s an avid teacher and subject matter expert who helps people—individuals and groups in a business setting—master the skills they need to achieve lasting financial wellbeing. As Founder and CEO of Xaris Financial Enterprises, it is her passion and life goal...

More about me

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