Marlese Lessing has been a writer for Bankrate since 2022. She brings a love of business finance and storytelling to her content creation expertise, alongside a background in B2B writing.
Rob is a Senior Editor at Bankrate.com. With over a decade of experience covering small business and tech content, Rob is passionate about giving readers the best possible information to help them make better decisions for their businesses.
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What to know first:
It can be challenging for business owners to secure a business loan with bad credit, especially from traditional banks. But even though your options are limited, it’s possible to find a lender that will approve you with a little research.
If you’re looking to get a business loan with a less-than-perfect credit score, Bankrate is here to help you find funding.
Bad credit business loans are often available to business owners with personal credit scores that are considered bad to fair (FICO scores of 300 to 669). You can find a variety of business loans for bad credit, everything from short-term loans to merchant cash advances to certain SBA loans.
These types of loans do come with downsides for a bad credit borrower, however. Lenders often offer lower loan amounts, charge higher fees and interest rates and have shorter or more aggressive repayment terms than traditional business loans. As well, they may require you to secure the loan with collateral or have higher revenue requirements.
Even so, if you have a bad credit score and need funding for your business, Bankrate can help you explore your options. We’ve named the best bad credit business loans below along with some tips to help you find the right loan for you and your business.
Get started on funding your business today
Answer a few questions and get matched with trusted financing solutions from our sponsored partner.
The listings that appear on this page are from companies from which this
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order products appear. This table does not include all companies or all
available products. Bankrate does not endorse or recommend any companies.
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Backd: Bankrate 2025 Award Winner Best lender for short-term business loans
Bankrate Score = 4.6/5 Bankrate scores are objectively determined by our editorial team. Our scoring formula weighs several factors consumers should consider when choosing financial products and services.
Loan amount
$5k-$750K
Term: 6 - 12 months
Interest rate
Interest will typically be quoted as an annual percentage rate (APR), which reflects interest rate and any other charges and fees you may have to pay.
Small businesses can get funding even with a relatively low annual revenue of $100,000 and at least one year in business. Repay the loan in daily, weekly or bi-weekly payments, depending on the loan you choose. You can even opt for a buy now, pay later option with 0% APR if repaid within 90 days.
Business credit score:
There are four companies that assess business credit scores: Dunn & Bradstreet (D&B), Experian, Equifax and FICO. Each
calculates their own scores based on various scales. D&B and
Experian rank on a 1-100 scale. FICO scores on a 0-300 scale.
Equifax generates 3 separate scores based on business payment
index (1-100), business credit risk (101-992), and business
failure (1,000 - 1,880).
N/A
Personal credit score:
A FICO score/credit score is used to represent the creditworthiness of a person and may be one indicator of the loans you are eligible for. However, credit score alone does not guarantee or imply approval for any financial product.
600
Personal guarantee requirement?:
This is a form of protection for lenders requiring the borrower to repay the loan from their personal assets if the
business defaults. A personal guarantee can help some
businesses access credit that typically wouldn't qualify.
Yes
Minimum time in business requirement:1 year
Minimum business annual revenue:$300,000
Fundible: Bankrate 2025 Award Winner Best small business lender for bad credit
Bankrate Score = 4.7/5 Bankrate scores are objectively determined by our editorial team. Our scoring formula weighs several factors consumers should consider when choosing financial products and services.
Loan amount
$5k-$5M
Term: 12 - 120 months
Interest rate
Interest will typically be quoted as an annual percentage rate (APR), which reflects interest rate and any other charges and fees you may have to pay.
*Rates, terms, & payment structure may vary by state and lender. Rates shown reflect an average fixed monthly percentage. A hard pull may be performed based on the product and lender, applicant will be notified if a hard pull is required for approval. Decision and funding time are subject to applicant’s submission of all requested approval and closing documents. Minimum qualifications listed are not reflective of all programs, rates and terms may vary based on applicants qualifications. By supplying us with your information, you authorize Streamline Funding LLC dba Fundible and prospective third-party funding providers to contact you at the numbers you provide (including mobile) during any step of this application, via phone (including automated telephone dialing systems, prerecorded, SMS and MMS means) even if you are on a Do Not Call Registry. You are not required to agree to be contacted in this manner to apply with Streamline Funding LLC dba Fundible.
Pros
Low personal credit score requirements
Variety of loan options
Fast funding
Cons
Some loans have stricter requirements
Uses partner network
You’ll need to apply to know what you qualify for
WHAT TO KNOW
Fundible offers six types of business loans, including term loans, business lines of credit, SBA loans and equipment financing. They offer in-house financing and work with a network of partners. Their minimum requirements are accessible, accepting a personal credit score of 450 and annual revenue of $100,000. Applying won’t impact your credit score, allowing you to see what products you qualify for. If approved, you could receive your funds within 24 hours.
Business credit score:
There are four companies that assess business credit scores: Dunn & Bradstreet (D&B), Experian, Equifax and FICO. Each
calculates their own scores based on various scales. D&B and
Experian rank on a 1-100 scale. FICO scores on a 0-300 scale.
Equifax generates 3 separate scores based on business payment
index (1-100), business credit risk (101-992), and business
failure (1,000 - 1,880).
N/A
Personal credit score:
A FICO score/credit score is used to represent the creditworthiness of a person and may be one indicator of the loans you are eligible for. However, credit score alone does not guarantee or imply approval for any financial product.
580
Personal guarantee requirement?:
This is a form of protection for lenders requiring the borrower to repay the loan from their personal assets if the
business defaults. A personal guarantee can help some
businesses access credit that typically wouldn't qualify.
No
Minimum time in business requirement:N/A
Minimum business annual revenue:N/A
OnDeck: Bankrate 2025 Award Winner Best lender for startups
Bankrate Score = 4.5/5 Bankrate scores are objectively determined by our editorial team. Our scoring formula weighs several factors consumers should consider when choosing financial products and services.
Loan amount
$5k-$250K
Term: 3 - 24 months
Interest rate
Interest will typically be quoted as an annual percentage rate (APR), which reflects interest rate and any other charges and fees you may have to pay.
You can apply for a loan with OnDeck online or by phone at 888-269-4246. Most applicants receive a decision in minutes, and funds are available as soon as the same business day or within one to three days. OnDeck charges a loan origination fee of up to 4 percent. OnDeck has terms up to 24 months for their term loan and business line of credit. The average annual percentage rate (APR) for their term loan is 56.10% and 55.90% for their business line of credit.
Funding isn’t available in North Dakota.
Business credit score:
There are four companies that assess business credit scores: Dunn & Bradstreet (D&B), Experian, Equifax and FICO. Each
calculates their own scores based on various scales. D&B and
Experian rank on a 1-100 scale. FICO scores on a 0-300 scale.
Equifax generates 3 separate scores based on business payment
index (1-100), business credit risk (101-992), and business
failure (1,000 - 1,880).
N/A
Personal credit score:
A FICO score/credit score is used to represent the creditworthiness of a person and may be one indicator of the loans you are eligible for. However, credit score alone does not guarantee or imply approval for any financial product.
625
Personal guarantee requirement?:
This is a form of protection for lenders requiring the borrower to repay the loan from their personal assets if the
business defaults. A personal guarantee can help some
businesses access credit that typically wouldn't qualify.
Bankrate Score = 4.4/5 Bankrate scores are objectively determined by our editorial team. Our scoring formula weighs several factors consumers should consider when choosing financial products and services.
Loan amount
$10k-$500K
Term: 12 - 60 months
Interest rate
Interest will typically be quoted as an annual percentage rate (APR), which reflects interest rate and any other charges and fees you may have to pay.
24/7 availability, Instant estimates , Rates starting at 5.99% with 12-60 month terms
Apply in 60 seconds, Get approved within 2 minutes, Get funded today
We stand behind our commitment to continuously provide small businesses with low cost financing. If you find a lower payment than ours, we'll beat it or pay you $250
We provide transparent, cost-effective equipment loans up to $250K. We’ve helped 1200+ businesses in over 175 industries acquire equipment to increase efficiency and expand operations
Pros
Fast access to funds
Low starting rates
Offers Lowest Payment Guarantee
Cons
High maximum rates
High annual revenue requirement
Potentially high fees
WHAT TO KNOW
Loans can be approved in as little as two to four hours and funded within one to two days.
Minimal annual revenue requirements vary and can range from $350,000 to $500,000. Interest rates vary: Equipment loans range from 5.99 percent to 24.99 percent and working capital loans range from 8.99 to 74.99 percent.
Business credit score:
There are four companies that assess business credit scores: Dunn & Bradstreet (D&B), Experian, Equifax and FICO. Each
calculates their own scores based on various scales. D&B and
Experian rank on a 1-100 scale. FICO scores on a 0-300 scale.
Equifax generates 3 separate scores based on business payment
index (1-100), business credit risk (101-992), and business
failure (1,000 - 1,880).
600
Personal credit score:
A FICO score/credit score is used to represent the creditworthiness of a person and may be one indicator of the loans you are eligible for. However, credit score alone does not guarantee or imply approval for any financial product.
600
Personal guarantee requirement?:
This is a form of protection for lenders requiring the borrower to repay the loan from their personal assets if the
business defaults. A personal guarantee can help some
businesses access credit that typically wouldn't qualify.
Bankrate Score = 4.6/5 Bankrate scores are objectively determined by our editorial team. Our scoring formula weighs several factors consumers should consider when choosing financial products and services.
Loan amount
$5k-$600K
Term: 3 - 15 months
Interest rate
Interest will typically be quoted as an annual percentage rate (APR), which reflects interest rate and any other charges and fees you may have to pay.
Enjoy some of the most competitive pricing in the alternative lending space
Factor rates* as low as 1.11
Daily, weekly, and monthly** payment and remittance options
Approvals as fast as 4 hours
Disclosures:
*Factor rates are included in your daily estimate to simplify remittances and account monitoring. Best factor rates available to merchants with excellent credit and financial strength.
**Some products are made available through Credibly’s network of external funding partners
Pros
Potential early repayment discount
Prequalify in as little as 10 minutes
Funds in as little as one day
Cons
Unavailable in 13 states
High minimum revenue requirement
High minimum borrowing amount
WHAT TO KNOW
For Credibly’s working capital loan, your business needs at least $25,000 in average monthly deposits for the last three months. Applicants must total at least a 51% stake in the business. Payments can be made daily or weekly. Credibly charges a 2.5% origination fee.
This loan is unavailable in the following states: CO, DE, GA, Ml, MT, NV, NJ, ND, OK, OR, SD, TX and VT.
Business credit score:
There are four companies that assess business credit scores: Dunn & Bradstreet (D&B), Experian, Equifax and FICO. Each
calculates their own scores based on various scales. D&B and
Experian rank on a 1-100 scale. FICO scores on a 0-300 scale.
Equifax generates 3 separate scores based on business payment
index (1-100), business credit risk (101-992), and business
failure (1,000 - 1,880).
N/A
Personal credit score:
A FICO score/credit score is used to represent the creditworthiness of a person and may be one indicator of the loans you are eligible for. However, credit score alone does not guarantee or imply approval for any financial product.
500
Personal guarantee requirement?:
This is a form of protection for lenders requiring the borrower to repay the loan from their personal assets if the
business defaults. A personal guarantee can help some
businesses access credit that typically wouldn't qualify.
Bankrate Score = 4.3/5 Bankrate scores are objectively determined by our editorial team. Our scoring formula weighs several factors consumers should consider when choosing financial products and services.
Loan amount
$1k-$150K
Term: 3 - 6 months
Interest rate
Interest will typically be quoted as an annual percentage rate (APR), which reflects interest rate and any other charges and fees you may have to pay.
Business lines of credit can provide business owners funds within one business day after approval. A minimum credit score of 600 and six months of time in business is required. There is a maximum limit of $150,000 with repayment terms of 12 or 24 weeks. Payments aren’t reported to business credit bureaus.
Business credit score:
There are four companies that assess business credit scores: Dunn & Bradstreet (D&B), Experian, Equifax and FICO. Each
calculates their own scores based on various scales. D&B and
Experian rank on a 1-100 scale. FICO scores on a 0-300 scale.
Equifax generates 3 separate scores based on business payment
index (1-100), business credit risk (101-992), and business
failure (1,000 - 1,880).
N/A
Personal credit score:
A FICO score/credit score is used to represent the creditworthiness of a person and may be one indicator of the loans you are eligible for. However, credit score alone does not guarantee or imply approval for any financial product.
600
Personal guarantee requirement?:
This is a form of protection for lenders requiring the borrower to repay the loan from their personal assets if the
business defaults. A personal guarantee can help some
businesses access credit that typically wouldn't qualify.
Bankrate Score = 4.3/5 Bankrate scores are objectively determined by our editorial team. Our scoring formula weighs several factors consumers should consider when choosing financial products and services.
Loan amount
Starting at $1k
Interest rate
Interest will typically be quoted as an annual percentage rate (APR), which reflects interest rate and any other charges and fees you may have to pay.
Loans include SBA loans, lines of credit and term loans, but most are for businesses with good credit and two years of being in business. Credit builders may be eligible for a cash secured line of credit with $50,000 in annual revenue and a $1,000 security deposit. Loans are slower to fund than loans offered by online lenders, but rates are likely lower for eligible businesses.
Business credit score:
There are four companies that assess business credit scores: Dunn & Bradstreet (D&B), Experian, Equifax and FICO. Each
calculates their own scores based on various scales. D&B and
Experian rank on a 1-100 scale. FICO scores on a 0-300 scale.
Equifax generates 3 separate scores based on business payment
index (1-100), business credit risk (101-992), and business
failure (1,000 - 1,880).
N/A
Personal credit score:
A FICO score/credit score is used to represent the creditworthiness of a person and may be one indicator of the loans you are eligible for. However, credit score alone does not guarantee or imply approval for any financial product.
670
Personal guarantee requirement?:
This is a form of protection for lenders requiring the borrower to repay the loan from their personal assets if the
business defaults. A personal guarantee can help some
businesses access credit that typically wouldn't qualify.
Bankrate Score = 4.3/5 Bankrate scores are objectively determined by our editorial team. Our scoring formula weighs several factors consumers should consider when choosing financial products and services.
Loan amount
$1k–$15k
Term: 1 - 36 months
Interest rate
Interest will typically be quoted as an annual percentage rate (APR), which reflects interest rate and any other charges and fees you may have to pay.
To qualify for Kiva microloans, your business must be based in the U.S. You have to be over 18 years old. Your business cannot be in foreclosure or bankruptcy or under any current liens.
Excluded industries:
Illegal activities
Marijuana, CBD or hemp
Pure financial investing like stocks
Multi-level marketing or direct sales
Kiva microloans cannot be used to refinance current debt.
Business credit score:
There are four companies that assess business credit scores: Dunn & Bradstreet (D&B), Experian, Equifax and FICO. Each
calculates their own scores based on various scales. D&B and
Experian rank on a 1-100 scale. FICO scores on a 0-300 scale.
Equifax generates 3 separate scores based on business payment
index (1-100), business credit risk (101-992), and business
failure (1,000 - 1,880).
N/A
Personal credit score:
A FICO score/credit score is used to represent the creditworthiness of a person and may be one indicator of the loans you are eligible for. However, credit score alone does not guarantee or imply approval for any financial product.
N/A
Personal guarantee requirement?:
This is a form of protection for lenders requiring the borrower to repay the loan from their personal assets if the
business defaults. A personal guarantee can help some
businesses access credit that typically wouldn't qualify.
Bankrate Score = 4.2/5 Bankrate scores are objectively determined by our editorial team. Our scoring formula weighs several factors consumers should consider when choosing financial products and services.
Loan amount
$1k-$300K
Interest rate
Interest will typically be quoted as an annual percentage rate (APR), which reflects interest rate and any other charges and fees you may have to pay.
Loans range from $1,000 to $150,000 for first-time borrowers and up to $250,000 for repeat borrowers. No credit check required for working capital loans as loans are based on PayPal account history. But there is a credit check required for business loan. A PayPal Business or Premier account that has been open for 90 days or more with at least $15,000 (for Business account) or $20,000 (for Premier) in annual PayPal sales.
Business credit score:
There are four companies that assess business credit scores: Dunn & Bradstreet (D&B), Experian, Equifax and FICO. Each
calculates their own scores based on various scales. D&B and
Experian rank on a 1-100 scale. FICO scores on a 0-300 scale.
Equifax generates 3 separate scores based on business payment
index (1-100), business credit risk (101-992), and business
failure (1,000 - 1,880).
N/A
Personal credit score:
A FICO score/credit score is used to represent the creditworthiness of a person and may be one indicator of the loans you are eligible for. However, credit score alone does not guarantee or imply approval for any financial product.
N/A
Personal guarantee requirement?:
This is a form of protection for lenders requiring the borrower to repay the loan from their personal assets if the
business defaults. A personal guarantee can help some
businesses access credit that typically wouldn't qualify.
No
Minimum time in business requirement:3 months
Minimum business annual revenue:$15,000
Accion Opportunity Fund: Bankrate 2025 Award Winner Best CDFI for small business loans
Bankrate Score = 4.1/5 Bankrate scores are objectively determined by our editorial team. Our scoring formula weighs several factors consumers should consider when choosing financial products and services.
Loan amount
$5k-$250K
Term: 12 - 60 months
Interest rate
Interest will typically be quoted as an annual percentage rate (APR), which reflects interest rate and any other charges and fees you may have to pay.
You can apply online or call 1-866-458-3555 to speak with a representative. Accion Opportunity Fund checks your personal credit with a soft pull so that it won’t affect your credit score. Accion reviews other factors besides credit scores to make funding decisions, but has a minimum time in business requirement of 12 months and a minimum revenue requirement of $50,000. You must also own at least 20% of the business. Origination fees start at 3% to 5%.
The loan is unavailable in the following states: MT, ND, SD, TN and VT.
Business credit score:
There are four companies that assess business credit scores: Dunn & Bradstreet (D&B), Experian, Equifax and FICO. Each
calculates their own scores based on various scales. D&B and
Experian rank on a 1-100 scale. FICO scores on a 0-300 scale.
Equifax generates 3 separate scores based on business payment
index (1-100), business credit risk (101-992), and business
failure (1,000 - 1,880).
N/A
Personal credit score:
A FICO score/credit score is used to represent the creditworthiness of a person and may be one indicator of the loans you are eligible for. However, credit score alone does not guarantee or imply approval for any financial product.
N/A
Personal guarantee requirement?:
This is a form of protection for lenders requiring the borrower to repay the loan from their personal assets if the
business defaults. A personal guarantee can help some
businesses access credit that typically wouldn't qualify.
Bankrate Score = 4.2/5 Bankrate scores are objectively determined by our editorial team. Our scoring formula weighs several factors consumers should consider when choosing financial products and services.
Loan amount
$5k-$1M
Term: 6 - 36 months
Interest rate
Interest will typically be quoted as an annual percentage rate (APR), which reflects interest rate and any other charges and fees you may have to pay.
Easy to use, no cost application that can be completed in minutes
Compare top financing offers with no credit check
Get approved and funded in as little as 24 hours
Pros
Compare loans from multiple lenders
Relaxed eligibility requirements
Quick online application
Cons
Limited information on its website
Potentially high fees
WHAT TO KNOW
Candidates most likely to get matched with a loan will have, $100,000 in an annual revenue, 600 personal credit score and 6 months in business. The following industries are excluded:
Vice industries
Non-profit organizations
Government entities
Money service businesses
Mortgage brokers
Firearms dealers
Business credit score:
There are four companies that assess business credit scores: Dunn & Bradstreet (D&B), Experian, Equifax and FICO. Each
calculates their own scores based on various scales. D&B and
Experian rank on a 1-100 scale. FICO scores on a 0-300 scale.
Equifax generates 3 separate scores based on business payment
index (1-100), business credit risk (101-992), and business
failure (1,000 - 1,880).
N/A
Personal credit score:
A FICO score/credit score is used to represent the creditworthiness of a person and may be one indicator of the loans you are eligible for. However, credit score alone does not guarantee or imply approval for any financial product.
550
Personal guarantee requirement?:
This is a form of protection for lenders requiring the borrower to repay the loan from their personal assets if the
business defaults. A personal guarantee can help some
businesses access credit that typically wouldn't qualify.
A closer look at our top bad credit business lenders
Before you sign on the dotted line of a new loan, compare options from multiple lenders. Some loans are better for startups with no or bad credit, while others are a better fit for companies with higher monthly revenue. Bankrate takes a deeper dive into the lenders from above to help you find the best bad credit business loan.
Fundible: Best for startups
Overview: Fundible is an online lender that can fund loans within just a few hours. As it has fewer approval requirements and an adjusted underwriting process, it can typically approve more applicants than traditional banks. Fundible offers lines of credit, term loans, SBA loans and more, offering a wider selection than most online lenders. This lender is a good option for startups as it only requires six months in business and has minimal annual revenue requirements through its network of partners.
Startups and business owners with bad credit can be good candidates for Fundible loans. Its website states you only need a personal credit score of 500 (a spokesperson said they will consider a score of 450) and an average monthly revenue of $8,000 to be considered for approval. It’s a good option for business owners who want to pay off debt quickly since there are no prepayment penalties.
Established in 2017
No early repayment penalties
Relaxed time in business requirement
High loan amounts for startups
BusinessLoans.com: Best for flexible repayments
Overview: BusinessLoans.com’s website is light on details, but a spokesperson confirmed with us that it offers several types of loans, including term loans, lines of credit and merchant cash advances. Depending on the loan, you may be able to qualify with a personal credit score of 550, an annual revenue of $100,000 and only six months of time in business. The lender has a fast term loan of up to $1 million that can be funded in as little as 24 hours.
If you need a business loan for bad credit or can’t qualify for a loan with other lenders, BusinessLoans.com’s lender network may be able to help. It’s worth checking out if you need funds the same day and want a longer repayment period. Its website states that you can get repayment terms up to 20 years, flexible terms compared to most online lenders that stop at 24 months.
Loan comparison between lenders
Fast approval and funding
High loan amounts
Relaxed time-in-business requirement
Backd: Best for short-term loans
Overview: Backd is an online lender offering business lines of credit, working capital loans and a buy now, pay later loan (dubbed BackdPay). It streamlines the online application process, preapproving loans in mere minutes and funding within 24 hours. Backd grants up to $750,000 for its line of credit and $2 million for its working capital loan, which are large amounts for an online lender. Its working capital loan offers terms of up to 16 months with flexible daily, weekly or semi-monthly payments.
Backd works well for businesses looking for fast, short-term funding with terms of 16 months or less. You may be able to take advantage of flexible repayments, depending on the loan you choose. This loan may also work for people who need to make a specific purchase fast. The unique buy now, pay later loan lets you make purchases up to $1.5 million without cash on hand and pay for them across 12 months.
Founded in 2018
Fast funding
Financed over $1 billion to small businesses
Flexible repayment terms
High loan amounts
Credibly: Best for fast prequalification
Overview: Thanks to its partner lenders as well as direct lending, Credibly offers many types of business loans to help small and medium-sized businesses quickly get the cash they need. Loan options include working capital loans, merchant cash advances, equipment loans and invoice factoring. Credibly is more accessible than other lenders. You can qualify for some loans with a personal credit score as low as 500, and you're able to prequalify without any impact on your credit score.
While Credibly has relaxed eligibility requirements, your chances of approval are best if you have a personal credit score of 675, annual revenue of $540,000 and three years' time in business. Top industries for Credibly include restaurants, contractors, electrical work, repair shops and offices/clinics of health practitioners.
Established in 2007
24-hour funding
Variety of loans available
Soft prequalification credit pulls
Fundbox: Best for line of credit
Overview: Fundbox is an online lender that focuses on helping businesses with working capital issues by offering lines of credit. This focus on a single type of loan lets it streamline the application process and improve the borrower experience. Fundbox’s online application takes as little as three minutes, and it can be funded within the next day. It also offers accessible lines of credit up to $150,000.
You won’t get penalized for repaying your loan early — and you can bypass the rest of the weekly fees by doing so. Plus, you can quickly access funding through Fundbox’s user-friendly online dashboard or app connected to your business bank account.
Fair-credit borrowers who need fast financing and can pay off their loans quickly may get the best value. Fundbox also makes approvals easy for startup businesses with a personal credit score of 600 and a minimum time in business of three months. However, the lender’s amortized weekly fees could add up to higher borrowing costs compared to other lines of credit, and the maximum credit limit is low compared to other credit lines that go up to $250,000.
No early repayment penalties
Robust online dashboard
Relaxed time-in-business requirement
Fast funding
Soft credit check for application
OnDeck: Best for flexible repayment terms
Overview: OnDeck is an online lender that has been around since 2006. The company has term loans and lines of credit with minimal application requirements. To be considered, businesses need a FICO score of just 625 and one year in operation. Many bad credit business loans have short terms, between six to 18 months, but OnDeck lets you choose terms up to 24 months. Its longer terms allow businesses to stretch out their loan schedule and lower their monthly payment.
Fair-credit borrowers who need fast financing and can pay off their loans quickly may get the best value. Fundbox also makes approvals easy for startup businesses with a personal credit score of 600 and a minimum time in business of just three months.
But the lender’s amortized weekly fees could add up to higher borrowing costs compared to other lines of credit, and the maximum credit limit is low compared to other credit lines that go up to $250,000.
Established in 2006
Same-day funding
Early repayment incentive
Longer repayment terms than other short-term lenders
Triton Capital: Best for fast funding
Overview: Started in 2008, Triton Capital offers working capital, equipment financing and SBA loans to businesses across all 50 U.S. states. It can approve some loans within hours, and funding often occurs within one business day. They also offer the convenience of choosing a payment term and payment frequency that best fits your budget. For example, its equipment financing loan offers monthly, quarterly, annual, semi-annual and seasonal payments.
Triton Capital is ideal for established businesses needing to cover immediate expenses up to $500,000. You’ll need at least one year of experience and steady revenue of at least $350,000 to get approved, but you can often get your funds within 24 hours.
Fast approvals
Established in 2008
Operates in all 50 states
Wide range of terms from 6 months to 7 years
Kiva: Best for microloans
Overview: Kiva is a non-profit entity that offers microloans to entrepreneurs across the globe. It’s a unique combination of a crowdfunding and peer-to-peer lending platform. It allows you to apply for financing and then raise funds through your personal network before submitting the loan to other individual investors.
Kiva offers microloans in the U.S. between $1,000 and $15,000 while charging zero interest. And since it doesn't have an annual revenue requirement, it's an inexpensive way for business owners to find a startup business loan with no money. Because it’s not technically a lender, it accepts brand-new businesses and borrowers with poor or no credit. Repayment terms are relatively short, going up to 36 months.
Because Kiva relies on community donations and investment, it’s ideal for businesses with strong community support or a unique idea that investors will be excited about. It also approves startup businesses with little-to-no credit history. Its loans rely more on “social credit,” your reputation for repaying the loan within the community, rather than your formal credit history.
No APR or fees
Builds business credit
Flexible repayment terms
Flexible credit terms
PayPal Working Capital: Best for no credit requirements
Overview: PayPal’s working capital loan takes an alternative approach to approving businesses based on creditworthiness and cash flow. Instead of considering credit, you’ll be approved for a loan based on the volume of your sales processed through PayPal. The company’s working capital loan acts similarly to a merchant cash advance and lets businesses choose the percentage automatically deducted from their future sales for repayment. The exact percentage and expected sales determine the repayment timeline.
You’ll need at least $15,000 in sales with a PayPal Business account and $20,000 with a Premier account. But instead of an annual percentage rate (APR), PayPal charges a single fixed fee, which may or may not result in high borrowing costs. You’ll have to apply to see the exact borrowing cost.
PayPal’s loans work well for business owners with low revenue who are okay with fast repayment terms. They are a good way for a company with little to no credit to start building a positive credit report. Businesses must have a PayPal Business or Premier account for at least 90 days.
Lenient time-in-business requirement
Fast funding process
Low minimum loan amount
Flexible term lengths
Accion Opportunity Fund: Best for low-interest loans for bad credit
Overview: Accion Opportunity Fund is a non-profit with a focus on offering microloans to disadvantaged communities, including term loans and commercial truck loans for $5,000 to $250,000. It provides educational opportunities in addition to financial funding, helping your business on its journey to long-term success. This lender advertises interest rates as low as 8.49 percent, a rare benefit for borrowers with bad credit.
The majority of Accion Opportunity Fund’s customers are women, people of color and people in low-to-moderate income brackets. It’s good for people in marginalized communities who need a loan between $5,000 and $250,000. To qualify for a loan with Accion Opportunity, you’ll need 12 months in business and $50,000 in annual revenue.
Focus on underserved communities
Low interest rates
Mentoring available
Educational support
Flexible term options up to 60 months
Bank of America: Best for secured credit building
Overview: Bank of America is one of the largest U.S. banks, with nearly 4,000 bank branches. Not all its loans will work for bad credit borrowers, but it does offer a cash-secured line of credit that can automatically convert to an unsecured line of credit as your business grows and builds credit.
Bank of America's cash-secured line of credit requires a minimum deposit of $1,000, but your credit line will be equal to your cash security deposit. The cash-secured line is accessible to new businesses under two years. The bank will review whether you’re eligible for an unsecured line of credit after 12 months.
Small business owners with at least $50,000 in annual revenue and six months in business are eligible to apply. This can be a good fit for anyone who doesn't need immediate financing but instead wants to build business credit and build a relationship with a lender. Doing so can improve their chances of getting approved for more affordable loan options in the future.
Available in all 50 states
Low interest rates
Free business credit report
Build business credit
What is a bad credit business loan?
Bad credit business loans are designed for companies with bad or limited personal or business credit. Eligibility requirements are more relaxed: Some lenders offer loans to small businesses with personal credit scores as low as 500. Minimum time in business and required annual revenue may also be lower. Keep in mind that bad credit business loans tend to have higher interest rates and fees, since the lender is taking more risk. They may also come with personal guarantee requirements. Bankrate’s list of lenders can help you get a quick look at the requirements and get an idea of which lender is best for you.
What is a bad credit score?
A bad credit score depends on the credit scoring model the lender uses. Most small business lenders look at your personal score rather than your business credit score, especially if you haven’t been in business for long.
For personal credit, a FICO score of 300 to 579 is considered bad credit. However, even if you have fair credit (FICO score of 580 to 669), you may still have to rely on a bad credit business loan.
Having a bad credit score can be caused by multiple factors, such as previous bankruptcies, missed loan or bill payments and multiple hard credit checks in a short period of time.
Lenders may also consider business credit scores, especially if you’re pursuing an SBA loan. Depending on the scoring model, business credit scores may range from 0 to 100, with scores of 0 to 49 indicating a high-risk borrower.
How does a bad credit business loan work?
Business loans for bad credit borrowers work similarly to any other loan. You submit an application and any documentation requested by the lender. Once approved, you can use the loan funds for business purchases. You then repay the bad credit business loan over a set time period with interest rates and fees.
Depending on the lender, underwriting for a bad credit business loan may take longer, and the lender is more likely to ask for supporting documentation that shows your ability to repay the loan. If you opt for a secured loan over an unsecured loan, you’ll need an asset of value as collateral, such as equipment or real estate. Unsecured loans don't need collateral but are aimed at companies with strong credit.
Requirements for a bad credit business loan:
Revenue. The more your business makes, the easier it is to get a loan. Some lenders have minimum revenue requirements of $100,000, though you can find lower revenue requirements like $30,000 with specific lenders.
Business plan. The business plan shows the lender how you expect to grow your business sustainably over time. It explains your expected revenue, your business model and how it stands out in the competition, your marketing strategy and key measurements you’ll use to gauge your success. Not all lenders require a business plan, but it can help you get approved by showing that you’ve done your homework on growing your business.
Credit history. Though these loans are aimed at companies with bad credit, the lender will still look at your credit report. Some especially negative factors, like a recent bankruptcy, could block you from getting a loan.
Time in business. New companies are risky propositions for lenders. Many lenders won’t offer loans until your company has been around for at least six to 24 months.
Collateral: Business loans with bad credit often require collateral to be used as repayment because the collateral mitigates the lender's risk in the event of default.
Personal guarantee. Many business loans require you to sign a personal guarantee, which secures the loan with your personal assets. Most lenders require it in addition to collateral or a down payment.
Existing business debt. The lender will consider your existing debts and whether you have enough financial strength to cover repayments on a new loan.
You’ll also need to provide documentation for the lender when you apply for a bad business loan. These documents include:
Profit and loss statements
Business formation documents
Recent bank statements
Business license and operating agreement
Employer identification number (EIN)
Recent personal and business tax returns
Balance sheets
Proof of business insurance
Payroll records
Expected revenue
Driver’s license
Lease agreement
List of accounts payable and accounts receivable
Business loan documents
Profit and loss statements
Business formation documents
Recent bank statements
Business license and operating agreement
Employer identification number (EIN)
Recent personal and business tax returns
Balance sheets
Proof of business insurance
Payroll records
Expected revenue
Driver’s license
Lease agreement
List of accounts payable and accounts receivable
Improving your business credit score requires considerable adherence to strict financial decisions. You need to take a close look at all the factors impacting your credit score and make a conscious effort to improve them. This includes your payment history, length of credit history, amount of debt, amount of new credit and more. In practice, pay your bills on time, keep your credit utilization low, ask vendors to report payments, and always monitor your credit score.
Emmanuel Nyame, CEO of Twelvenets
How to get a small business loan with bad credit
Getting a small business loan with bad credit can take more time and effort than applying for one with good credit. Here’s what it involved.
1. Figure out how much funding you need.
Calculate how large of a business loan you need to borrow with Bankrate’s loan calculator. Make sure to account for origination and other fees that the lender will add to that amount. Aim for an amount that will cover your needs without asking for more well above your needs. This way, the lender is more likely to approve you for the full amount.
2. Check your credit score.
Look at your personal and business credit reports to identify anything you can improve in the short term. For example, you might ask for a correction on your credit report if you spot an error. You will also use your credit score to determine if you meet a lender’s eligibility criteria. You can request one free credit report a week from all three credit bureaus through AnnualCreditReport.com.
3. Find lenders.
Look for bad credit business lenders that are willing to work with business owners who have poor credit and narrow down your options based on eligibility requirements, interest rates and fees. Many online lenders will post their minimum requirements on their websites. If you have questions about a lender’s requirements or other loan features, you can contact the lender for more information. Bankrate lists lenders and loans for small businesses that can help you determine which one is right for you.
4. Apply for the loan.
Now that you’ve narrowed down your options, you can apply for the loan or multiple loans. Many online lenders let you prequalify, which helps you see what you’re eligible for without a hard pull on your credit. Make sure you have any necessary business loan documents ready to help speed up the process.
5. Compare loan options.
Once you receive the loan offers from lenders, look at the rates, fees and loan terms to find the best deal. Bankrate’s expert ratings can help you select the best lender for you based on your criteria. Choose a loan offer based on the best bad credit business loan that fits your needs.
Bankrate Insight
Many business loans for bad credit borrowers charge factor rates like 1.10 or 1.40 instead of interest rates. These factor rates get applied to the entire loan upfront and often convert into high interest rates.
For example, a factor rate of 1.30 converts to a 20 percent annual percentage interest rate (APR) for an 18-month loan. For a $50,000 loan repaid over 18 months with a factor rate of 1.30, you’d end up paying $15,000 in interest versus about $8,287 for the same loan with interest charged as an APR.
Types of bad credit business loans
There are many types of business loans for borrowers with bad credit. Some of these loans are secured or have automated repayment plans, which may make them easier to qualify for than unsecured loans.
SBA loans are loans partially guaranteed by the Small Business Administration. While many SBA loans require higher credit criteria, some types of SBA loans have relaxed eligibility requirements. This includes 7(a) loans through Community Advantage Lending Companies and SBA microloans. Though it can take time to get approved for these loans, the interest rates are lower than standard business loans open to borrowers with bad credit.
Business term loans provide a lump-sum payment upfront that must be repaid over a fixed period. Some term loans are short and have repayment terms ranging from one to two years. Medium- and long-term loans may range from three to 10 years. Lenders may offer you a short-term loan to help mitigate the risk of lending to a bad-credit borrower.
Microloans are term loans offered in small amounts. Though there isn’t a set standard, SBA microloans offer loans for $50,000 or less. They’re often easier to qualify for than larger loans because the small loan size poses less risk to the lender. Many businesses use them for startup costs.
Lines of credit are usually revolving lines of credit, similar to business credit cards. This type of financing gives you the flexibility to draw funds multiple times up to the credit limit, and you can withdraw funds any time during the draw period.
You can get approved for a line of credit and wait to use the funds until you need them. Some lines of credit have variable interest rates, which may make repayment less predictable than other loans.
Equipment loans work similarly to term loans by providing a lump sum and repayment terms typically over one to five years. But this loan uses the equipment you’re financing as collateral to secure the loan. Because it’s secured, it’s easier for bad credit businesses to qualify for it. It can also offer higher loan amounts and lower interest rates than unsecured loans.
Invoice financing allows business owners to get paid immediately for their clients’ unpaid invoices for a fee. The business submits the invoices to the lender for review, and the lender advances a portion of the total invoice amount, such as 80 percent.
The business then pays the fee once clients make good on the invoice. These loans are often easier to qualify for if you have bad credit because lenders are more concerned with the credit score and repayment history of invoiced clients.
Invoice factoring works similarly to invoice financing in that the funding is based on outstanding invoices from customers. But instead of collecting payments yourself, you sell the invoices to a factoring company to collect directly from your clients. It then advances capital to your business to use for expenses and collects its own fees once clients pay.
Merchant cash advances provide upfront cash to help a company meet short-term needs. The business then repays it automatically by sending a percentage of its debit and credit card sales to the lender. This is often one of the most expensive forms of business financing and can lead to a cycle of debt if the business owner is unable to pay back the debt quickly.
Pros and cons of bad credit business loans
As with any type of financing, business loans with bad credit have benefits and drawbacks to consider.
Pros:
Flexible eligibility criteria. Lenders offering business loans to credit-challenged borrowers typically have more leniency than you’ll find with traditional banks.
Access to fast cash. You can get the money your company needs quickly as some lenders offer rapid funding — sometimes the same day or in just a few business days.
Helps build credit. If account activity is reported to the credit bureaus, your payment history could improve, and your score will likely increase as you repay the loan. The improved score will help you get more favorable terms if you apply for more financing in the future.
Cons:
Loan limits. The amount you qualify for could be far less than what you need since the cap on business loans for bad credit borrowers may be lower.
Borrowing costs. Expect higher interest rates and fees, as bad credit business loans are riskier for lenders due to the elevated chance of default.
Collateral requirements. Borrowers may have to put up collateral. If you take out a secured loan, you could lose the collateral you put up if you fall behind on the loan payments.
Can you get a business loan with no credit check?
While most lenders won’t offer you a traditional business loan with no credit check, some lenders offer loans with no credit check in the form of a merchant cash advance, invoice factoring or buy-now-pay-later (BNPL) financing.
These financing options allow you to get funding without a credit check by relying on future revenue streams, or by offering fairly small loans. With a merchant cash advance or invoice financing, you promise to pay back a certain portion of the future sales and invoices you make, along with fees and interest.
While this allows you to access funding without a credit check, lenders typically charge a much higher interest rate than traditional loans, and often have higher revenue requirements. It will also limit your revenue for the immediate future.
BNPL financing can also offer funding with no credit check. Some lenders and merchants allow you to take out a small loan for a short term, with weekly or monthly interest-free payments. These loans tend to be fairly limited in availability, and generally offer under $50,000 in funds. As well, missing payments can incur high fees and interest rates. However, if you pay back the loan on time, you can avoid a credit check and paying interest.
If you’re looking to avoid getting a hard credit check when applying for a business loan, some lenders offer pre-approval using a soft credit check, which doesn’t impact your credit score. However, the lender will eventually run a hard credit check when you officially apply, which means you can’t avoid a credit check if you decide to go through with the loan.
Bankrate Insight
When you’re getting any type of loan, especially one for businesses with poor credit, you should be on the lookout for scams, malicious actors and bad deals.
Some red flags to keep an eye out for are:
Time pressure. Be wary of any lender advertising time-limited deals that encourage you to get a loan before you have time to think about it.
Guaranteed approval. No good lender will approve every application it sees, so if you see this promise, be wary.
Upfront fees. Be careful of online lenders that ask for upfront fees, such as application fees. If the lender is a scammer, you might pay the fee and never hear back.
Where to get a bad credit business loan
Many lenders offer business loans for bad credit. The right one for you will depend on the type of loan you need and who offers the best rates, terms and features. Make sure to shop around before accepting any offer.
Online lenders. Online lenders often specialize in fast approval and funding. Many also work with bad credit borrowers, but their interest rates and fees can be quite high.
SBA lenders. These lenders are approved by the Small Business Administration to fund SBA loans. Each lender sets its own requirements, usually wanting a solid credit history. But business owners with bad credit may qualify through community-based lenders or for specialized loans like SBA microloans.
Community Development Financial Institution (CDFI). A CDFI is a lender that specifically aims to serve low-income and other underserved communities. There are nearly 1,500 CDFIs in the US, according to the New York Federal Reserve Bank. They can be a good source of low-cost funds if you plan to start a company in an underserved area.
Minority Depository Institutions (MDI). An MDI is an institution that is either mostly owned by minority individuals, or its board members are mostly minority individuals. They typically specialize in lending to minorities more than traditional banks, especially offering SBA loans.
Invoice factoring companies. These companies buy unpaid invoices from businesses, advancing cash the business can use for expenses. Some factoring companies also lend other business loans, while others specialize in invoice factoring.
Microlenders. You can often find microlenders online, through nonprofits or through business groups in your area. They might take longer to fund your loan but can be a good way to get small amounts of cash at reasonable rates.
Banks. Many traditional banks offer better rates and fees but may have strict requirements. If you have bad credit, your best chance of qualifying with a traditional bank is likely with the one you use for your business checking account.
Alternatives to bad credit business loans
If you aren't sure that a bad credit business loan is right for you, consider these alternatives:
Many lenders offer personal loans to business owners with poor credit. You’re putting your own credit score and assets at risk, but they can be a good source of funding in a pinch, especially if you’re just starting your company. While these loans can typically be used for any purpose, you'll want to confirm with the lender that you're able to use the funds for business.
If you have time to build credit, a secured business credit card for bad credit can help. They may not have all the features of an unsecured business card, but they can help you build credit and may have select features like rewards, free employee cards or secondary benefits like extended warranties and roadside assistance.
Crowdfunding campaigns can help you raise money by having many people offer small amounts. You usually pitch your business for funding using a crowdfunding platform like Kiva or Kickstarter. If you have a product idea, this can be a good way to pre-sell the product, get money from interested buyers and use that cash to start your business and produce the product they want to buy.
Small business grants can be competitive, but they’re a source of funds that you won’t have to repay. Most grants come from the federal, state or local government, though you can find some with large corporations. You have to meet each grant’s criteria to apply, such as the type of business or customers you serve.
Though not as widely available, special purpose credit programs help economically disadvantaged groups from historically underserved communities by providing relaxed eligibility requirements and reduced rates on business loans. These programs are often offered through banks like Chase and First National Bank.
Frequently asked questions about bad credit business loans
Yes, getting a startup business loan is possible if your credit score is on the lower end, though your loan options may be limited to certain bad credit business loans or specific lenders. Be mindful that you must meet the lender’s other eligibility requirements. You may also be required to put up collateral if a secured loan is your only option.
It depends on the lender, but you could be eligible for a bad credit business loan with a credit score as low as 500. Many lenders stay in the mid-500 to 600 range.
Reach out to the lender to determine why your application was denied and inquire about other loan offerings. You can also try other more lenient lenders or take a step back and work on your credit rating before applying again. You could also look into borrowing money from family or friends, through crowdfunding or by using personal funds, called bootstrapping.
How Bankrate chooses our best bad credit business loan lenders
Bankrate's trusted small business loan industry expertise
To choose the best business loans for bad credit, we ensured all loans featured offered eligibility with a credit score below 630 and are broadly available across the United States. We then considered features that make loans affordable and accessible to businesses with different characteristics and needs, including interest rates, required time in business, minimum annual revenue and fees.
When evaluating lenders, we use a 22-point scale to measure quality in five key areas:
Access to small business funding is a challenge for many business owners. Rate hikes and bank turmoil have led to lenders tightening credit standards and eligibility requirements. This can make it difficult for startups, bad-credit borrowers and business owners in underserved areas to get approved for small business loans.
Our experts consider several factors in this category and award higher scores to lenders that offer flexible loan amounts, fast approval and funding and inclusive time in business and annual revenue requirements.
The affordability of a business loan often depends on a business owner's financial profile. A business with high revenue and a flexible budget will likely be able to afford most loan options. Businesses considered high risk, such as startups or those with bad credit, may struggle to find loans with affordable interest rates and reasonable fees.
We consider a business loan affordable if the payments are manageable, you have the lowest possible rate based on your creditworthiness and there are minimal fees. Lenders that have lower rates, offer rate or fee discounts and have minimal fees receive higher scores.
A good customer experience requires a lender to be transparent, efficient and responsive. Reputable lenders that value their customers are easy to communicate with, responsive to your questions and concerns and willing to go the extra mile to make sure you have a positive experience for the life of the loan.
Lenders offering online accounts and applications and a range of customer support availability score higher in this category.
While the Truth in Lending Act (TILA) protects consumers against unfair or harmful lending practices, it doesn’t apply to business loans. This can make it harder to get straightforward and upfront information on loan costs when comparison shopping. We score lenders that make it easy to find rates and fees, as well as eligibility and credit score requirements, higher than those who do not disclose information.
Loan flexibility is finding a loan to meet your needs, even if you don’t have high annual revenue, several years in business or the best credit score. Loan flexibility can look like lenders that offer multiple lending products, variety in loan terms or unique options to give business owners the opportunity to fund their businesses in a way that works for them.
Lenders scoring high in this category offer varied products and services to cater to all types of borrowers and businesses.
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