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Best business loans for bad credit

Get a good deal with a lender that looks beyond your personal credit score.

Updated . What changed?

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Online and alternative lenders are your best bet when you have bad credit — usually defined as a credit score of 300 to 579. Our experts reviewed over 150 business loan providers and made this list based on factors like minimum credit requirements, APR ranges and fees.

We favored lenders that were low cost compared to other options, had strong customer service and considered factors beyond your credit score — like revenue, time in business and accounting data — to help you get approved for a decent deal.

6 best business loans for bad credit

Lendio business loans logo
Finder Rating: 4.75 / 5

★★★★★

Check eligibility
on Lendio business loans's secure site

Best marketplace: Lendio business loans

560
Min. Credit Score
6%
Starting APR
$5,000,000
Loan Amount
Lendio works with over 300 lenders to help your business find the right type of financing. It's one of the largest networks out there, and offers other tools like bookkeeping software that can let your business know when it's eligible for financing.
  • Network of over 300 lenders
  • Wide range of business loan options
  • Additional tools available
  • Must pay origination fee after loan is finalized
  • May receive marketing material from lenders
Min. Loan Amount $500
Max. Loan Amount $5,000,000
APR Starting at 6%
Interest Rate Type Variable
Min. Credit Score 560
Minimum Loan Term 12 months
Maximum Loan Term 300 months
Fundbox business loans logo
Finder Rating: 4.76 / 5

★★★★★

Check eligibility
on Fundbox business loans's secure site

Best invoice financing: Fundbox business loans

500
Min. Credit Score
4.99%
Starting APR
$100,000
Loan Amount
Fundbox offers lines of credit backed by your invoices. It puts more weight on your business's finances than your credit score, offering a chance to qualify for a competitive rate. It also regularly reviews your account to offer different rates and terms based on your repayment history. But you need to use an eligible type of financing software to qualify.
  • May receive funds in 1 business day
  • Receive 100% of invoice's value
  • Prioritizes business's finances over credit score
  • Must use supported bookkeeping software
  • Comes with weekly repayments
  • Steep late fees
Min. Loan Amount $1,000
Max. Loan Amount $100,000
APR 4.99
Interest Rate Type Fixed
Min. Credit Score 500
Minimum Loan Term 3 months
Maximum Loan Term 6 months
Turnaround Time As soon as 1 business day

Best term loan: SBG Funding small business term loans

500
Min. Credit Score
5%
Starting APR
$5,000,000
Loan Amount
SBG Funding is one of the few lenders that offers standard term loans with low rates and works with bad-credit borrowers. Even its maximum APR is lower than what you'll find on other bad-credit term loans. It also has a responsive customer service team, so you can get assistance when you need it. But it has a high annual revenue requirement, and you might have to make weekly repayments.
  • Low starting APR of 5%
  • Works with businesses in high-risk industries
  • Responsive customer service
  • High annual revenue requirement of $150K
  • Potential weekly repayments
  • Not transparent about fees
Min. Loan Amount $5,000
Max. Loan Amount $5,000,000
APR 5% to 35%
Interest Rate Type Fixed
Min. Credit Score 500
Minimum Loan Term 6 months
Maximum Loan Term 60 months
Turnaround Time As soon as 3 business days

Best short-term loan: LoanBuilder business loans

550
Min. Credit Score
None
Starting APR
$500,000
Loan Amount
Loanbuilder — a PayPal service — offers short-term loans with flexible requirements, including a low minimum credit score requirement. It's great for an emergency, since you can potentially get your funds the business day after you apply. Instead of interest, it charges a one-time fee that's low compared to other similar products — though it's more costly than a standard business loan.
  • Potential next-day turnaround
  • Low revenue and credit requirements
  • Weekly repayments
  • High cost compared to other types of loans
Min. Loan Amount $5,000
Max. Loan Amount $500,000
Fee 6.49% to 19.31%
Interest Rate Type N/A
Min. Credit Score 550
Minimum Loan Term 3.25 months
Maximum Loan Term 12 months

Best microloan: Kiva business loans

None
Min. Credit Score
0%
Starting APR
$15,000
Loan Amount
This microlender offers 0% APR loans to all credit types and funds them using donations. But you'll have to have some support from friends — you're required to get at least 10 people you know to contribute to your campaign before it opens to the wider Kiva community. If that's feasible for you, it's one of the best deals out there.

Update: In light of the COVID-19 pandemic, Kiva has announced it will loosen its eligibility requirements and extend its maximum loan amount by $5,000 — to a total of $15,000. Additionally, borrowers can request a six-month grace period before payments are due.

  • No interest or fees
  • All credit types welcome
  • No residency requirements
  • Relies on your social network for crowdfunding
  • Can take up to 45 days to raise funds
Min. Loan Amount $25
Max. Loan Amount $15,000
APR 0%
Interest Rate Type N/A
Minimum Loan Term 1 months
Maximum Loan Term 3 months
Rapid Finance small business loans logo
Finder Rating: 3.74 / 5

★★★★★

Check eligibility
on Rapid Finance small business loans's secure site

Best merchant cash advance: Rapid Finance small business loans

500
Min. Credit Score
N/A
Starting APR
$1,000,000
Loan Amount
Rapid Finance offers advances on future sales at some of the lowest costs out there for bad credit — though still more expensive than a term loan. It also offers up to $500,000 in financing through its merchant cash advance program. But you can expect daily repayments.
  • Competitive factor rate of 1.09 to 1.3
  • Get funds in just one business day
  • Amounts up to $500,000 available
  • Short maximum loan term of 18 months
  • May require daily repayments
Min. Loan Amount $5,000
Max. Loan Amount $1,000,000
APR Fee based
Fee 9% to 30%
Interest Rate Type Fixed
Min. Credit Score 500
Maximum Loan Term 18 months
Turnaround Time As fast as 1 business day

Summary of best business loans for bad credit

LenderMinimum credit scoreBest for … Finder RatingWhat sets it apart
Lendio560Comparing lenders★★★★★

4.79 / 5.0

A network of over 75 lenders plus software that lets your business know when it’s eligible for financing.
Fundbox500Invoice financing★★★★★

4.76 / 5.0

Regular account reviews to offer more competitive rates as you repay the loan.
SBG Funding500Long-term loans★★★★★

4.20 / 5.0

Some of the lowest starting rates available for a lender that accepts poor credit and high-risk industries.
LoanBuilder550Short-term loans★★★★★

4.24 / 5.0

Same-day funding and low fees — compared to similar products.
KivaNoneMicrofinancing★★★★★

3.70 / 5.0

A 0% APR with no time in business or credit requirements, partly funded by your community.
Rapid Finance500Merchant cash advances★★★★★

3.74 / 5.0

Some of the lowest factor rates of 1.09 to 1.3 — compared to other merchant cash advances.

Where can I find a lender that accepts bad credit?

Start your search for a bad-credit business loan with these types of lenders.

Online lenders

Many online lenders look at different factors than traditional lenders — and are typically open to bad credit. Often, they connect with your business’s bank account or accounting software to take a deep dive into your finances and growth potential.

This makes it easier to qualify with bad credit. But the downside is they often charge higher rates than traditional lenders. And you need to do a little detective work to make sure the companies are legit.

Compare online business loans

Local banks and credit unions

Local banks and credit unions typically require you to sit down with a loan officer to discuss your options. This gives you a chance to explain any negative marks on your personal credit score. If you have a good reason for the low rating — say you got a divorce — your lender might be willing to make an exception to its credit score policy.

Asset-based lenders

Asset based lenders offer financing backed by business assets, like accounts receivable, invoices, equipment or real estate. The difference between an asset-based loan and a secured business loan is you’re using collateral you already own, not real estate or equipment you’re using the loan to purchase.

Usually these lenders also work with businesses that don’t have the cash flow to qualify for a loan at a local bank or credit union.

Merchant cash advance and factoring companies

Merchant cash advances and factoring are both advances on future revenue. Merchant cash advances offer and advance on your business’s future credit and debit card sales. A factoring company purchases your unpaid invoices at a discount.

Since they’re advances, many don’t consider your credit at all. But save these as a last resort. They’re one of the most expensive types of financing out there.

Find a merchant cash advance provider

Alternative lenders

Alternative business loans are high-cost short-term financing for small businesses — and are absolutely a last resort. These often work like merchant cash advances, where your loan amount is based on your monthly revenue and you pay a fixed fee instead of interest. These are available to high-risk industries, bad credit borrowers and typically have low credit requirements.

Compare alternative business loans

How to choose the best lender for your business

Here’s how to find a provider that will suit your business’s unique needs:

  • Nail down the type of business loan you want. Figure out what type of financing you’re looking for — and what alternatives would work.
  • Compare the total cost. The easiest way is to compare APRs. If a lender charges fees or monthly interest, use a calculator to find out what the APR is based on fees and the term.
  • Read reviews. Look out for red flags by reading reviews on sites like the Better Business Bureau and Trustpilot.
  • Contact customer service. Many lenders don’t display all the information you need online. But you can often get a ballpark idea of the rates and terms your business might qualify for by calling customer service.
  • Consider repayments. Often, bad-credit loans come with weekly or daily repayments. Look for a lender with a monthly option if your business can’t handle that frequency.

Do lenders consider personal or business credit scores?

Lenders most often look at the personal credit of all business owners — that is, anyone with more than a 20% stake in the company. That’s because most business loans come with a personal guarantee, which means you’re responsible for repayments if your business fails.

A few also consider your business credit score, though it’s not used as often. If your business has a credit score of 50 or below, you might have trouble getting a loan in some instances. But a strong personal credit score can often make up for bad business credit.

Are personal and business credit reports the same?

They aren’t. Your personal credit report is based on your history of paying back personal credit accounts, while a business credit report is based solely on credit in your business’s name.

If you’ve personally defaulted on a loan, that won’t show up on your business credit report. But business loan default could show up on your personal credit report since they typically require a personal guarantee from the owner.

What other factors do lenders consider?

Lenders usually look at the following factors when reviewing your loan application.

  • Revenue. Most lenders require you to make at least $100,000 a year to qualify for a loan.
  • Time in business. Often you need to be around for at least a year to meet a lender’s minimum requirements.
  • Cash flow. How much money does your business have after expenses each month?
  • Business assets. Keep tabs on the cash value of the equipment, real estate and other assets that your business owns.
  • Personal net worth. Review the value of each owner’s assets — like bank account balances, cars, real estate — of each business owner after you subtract their debts and other liabilities.
  • Industry. Some lenders consider industries like finance, alcohol sales and real estate development to be high risk. This can affect your eligibility for a loan.

How do I get a business loan with bad credit?

Follow these steps to maximize your chance of getting approved — even with a low credit score:

  1. Write a business plan. A strong business plan lets you make a case for your business beyond what lenders consider on the application, and can help you get approved.
  2. Check your credit report. Make sure there are no mistakes hurting your credit. If you notice any, contact the creditor to fix it.
  3. Find your strengths. Look for the area where your business does best and try to find a lender that rewards that strength — like high revenue or years in business.
  4. Wait for the right time. Apply in the middle of the high season. You’ll have a few months of your best revenue behind you, which can spark confidence in a lender.
  5. Compare a wide range of lenders. Consider more than business term loans. Find other products that might fit your needs — like a cash advance or factoring.
  6. Prequalify. If possible, fill out prequalification forms with your top choices to find out what rates, terms and loan amounts your business might receive.
  7. Compare APRs. If a loan comes with a monthly rate or fixed fee, convert it into an APR to accurately compare costs.
  8. Apply using a specialty lender. Use a connection service, go to a Small Business Development Center event put on by the Small Business Administration or visit a nonprofit community development financial institution (CDFI) to find low-cost funding.

Can I get a startup loan with bad credit?

It’s possible to get a startup loan if you have bad credit, but your options are very limited. A microlender like Kiva might be your best choice — Kiva doesn’t charge any interest or require you to have any time in business.

If you have experience in your new business’s industry, consider applying with a lender where you get to sit down and discuss your application. That could help convince a lender that you know what you’re doing.

4 inexpensive alternatives to bad-credit business loans

Your credit score doesn’t matter with these four business loan alternatives — which don’t come with high interest rates or fees.

  • Crowdfunding. Set up a campaign on a site like Kickstarter or GoFundMe to get financing for a new project.
  • Rollover for business startups (ROBS). This option lets you use your retirement fund to start a business without paying penalties.
  • Equity financing. Trade ownership for funding by bringing on investors. If an investor with good credit takes over 20% of your company, it could help your chances of getting a business loan down the line.
  • Grants. Businesses in underserved communities might be able to qualify for a grant from the government or a private foundation.

Bottom line

You’ll find the most options online if you have bad credit. But if your business is struggling in other ways, you might want to consult an expert before you apply — and consider alternatives. Learn more about your financing options by reading our guide to business loans.

Find a business lender that won’t check your credit

Data indicated here is updated regularly
Name Product Filter Values Loan amount APR Requirements
First Down Funding business loans
$5,000 – $300,000
Fee Based
At least 1 year in business, an annual revenue of $100,000+, and a minimum credit score of 400
Alternative financing up to $300K with highly competitive rates.
Fora Financial business loans
$5,000 – $500,000
6+ months in business, $12,000+ monthly revenue, no open bankruptcies
No minimum credit score requirement and early repayment discounts for qualifying borrowers.
Fundbox business loans
$1,000 – $100,000
4.99
You must have an established business.
Get flat rate, short-term financing based on the financial health of your business, not your credit score.
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