Best business loans for fair credit

Best business loans for fair credit

OnDeck Business Loan

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OnDeck Canada provides fast and affordable business loans. Borrow anywhere from $5,000 - $300,000 with terms lasting from 6 - 18 months. You'll have to repay the amount you borrow with fixed daily or weekly amounts, and your interest rates will range from 9.99% – 29.00%. Interest will depend on a number of factors like the state of your credit, how much you borrow and the length of your term.

• Pros and Cons

  Pros

  • Quick financing (get cash in as little as 24 hours)
  • Large loan amounts
  • No collateral required to qualify
  • Several loan types

  Cons

  • Less competitive interest rates
  • Minimum credit score of 600
  • Businesses less than 6+ months old won't qualify

• More details

  Interest Rate	9.99% – 29.00%
  Loan Amount	$5,000 - $300,000
  Loan Term	6 - 18 months
  Fees	No additional fees
  Turnaround Time	in as little as 24 hours
  Loans Offered	Secured Term, Line of Credit, Merchant Cash Advance
  Serviced Provinces/Territories	All provinces and territories
  Minimum Revenue	$100,000/year
  Min. Credit Score	600
  Minimum Time in Business	6+ months

Interest Rate	9.99% – 29.00%
Loan Amount	$5,000 - $300,000
Loan Term	6 - 18 months

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Loans Canada Business Loan

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Loans Canada makes comparing multiple lenders easy with a single, streamlined application process. Simply provide some personal information and details about your business, then get matched with a list of lenders who will contact you to discuss your loan options. Loan types vary with amounts ranging from $4,000 - $500,000, and terms of up to 5 years. Interest rates vary based on your credit score, how long you've been in business and other factors.

• Pros and Cons

  Pros

  • Access to multiple lenders through a single application
  • Personalized loan options based on your business's needs
  • Loans for a wide variety of credit scores, even bad credit
  • Available in all provinces

  Cons

  • Must have at least $120,000 in annual revenue
  • Must have been operating for at least 100 days

• More details

  Interest Rate	6.60% - 29.00%
  Loan Amount	$4,000 - $500,000
  Loan Term	3 - 60 months
  Fees	Wire / EFT Fee up to $99.95
  Turnaround Time	48 Hours
  Loans Offered	Unsecured Term
  Serviced Provinces/Territories	All Provinces
  Minimum Revenue	over $10,000/month
  Min. Credit Score	410
  Minimum Time in Business	100 days

Interest Rate	6.60% - 29.00%
Loan Amount	$4,000 - $500,000
Loan Term	3 - 60 months

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iCapital business loan

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iCapital business loan offers lines of credit, merchant cash advances, secured business loans and term loans for Canadian businesses that have been in operation for at least 6 months.You’ll need to make $5,000 in credit/debit sales each month to get a merchant cash advance and $100,000 in annual revenue for a business loan. All types of credit are acceptable as long as businesses don't have any open bankruptcies. Weekly, biweekly and monthly repayment schedules are available for secured business loans. There are no early repayment fees for term loans.

• Pros and Cons

  Pros

  • Flexible credit score requirement. Businesses with below-average credit and no open bankruptcies can apply
  • Multiple financing options available to suit different business needs
  • Flexible repayment plans available
  • No early repayment fee for term loans

  Cons

  • Must have been in business for at least 6 months (not suitable for startups)
  • Some types of businesses are not eligible: construction companies, funeral homes, furniture stores, jewelry stores, cheque cashing businesses and home-based businesses

• More details

  Interest Rate	From 9.99%
  Loan Amount	From 9.99%
  Loan Term	12 to 120 months
  Minimum Revenue	You’ll need to make $5,000 in credit/debit sales each month to get a merchant cash advance and $100,000 in annual revenue for a business loan
  Minimum Time in Business	6 months

Interest Rate	From 9.99%
Loan Amount	From 9.99%
Loan Term	12 to 120 months

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Merchant Growth Business Loan

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A Merchant Growth Business Loan provides alternative financing in the form of an advance on your future sales. A loan amount is determined based on your businesses profile and sales history. If approved, funds are advanced in as little as 24 hours and repaid by a percentage of your sales over time. Both flexible and fixed repayment options are available. There is no penalty for paying off your loan early.

• Pros and Cons

  Pros

  • Applicants with varying credit scores are accepted. Eligibility is based on a wide variety of factors, especially your sales history
  • Repayment terms are just an estimate. You won't be penalized if sales fluctuate and it takes longer to repay the loan
  • No early repayment penalty
  • E-commerce businesses can qualify for financing

  Cons

  • Only suitable for business that make regular daily or weekly sales
  • Minimum of 6 months in business
  • Your withholding (or repayment) percentage cannot be changed once funds have been disbursed

• More details

  Interest Rate	12.99% - 39.99%
  Loan Amount	$5,000 - $500,000
  Loan Term	3 - 12 months
  Fees	No application fees.
  Turnaround Time	24 hours
  Loans Offered	Unsecured Term, Line of Credit, Merchant Cash Advance
  Serviced Provinces/Territories	All of Canada
  Minimum Revenue	$10,000 /month
  Min. Credit Score	550
  Minimum Time in Business	6 months

Interest Rate	12.99% - 39.99%
Loan Amount	$5,000 - $500,000
Loan Term	3 - 12 months

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Other business loans you can apply for today

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Name	Product	Interest Rate	Loan Amount	Loan Term	Minimum Revenue	Minimum Time in Business	Loans Offered
SharpShooter Funding Business Loan		5.49% - 22.79%	$1,000 - $300,000	6 - 120 months	$10,000 /month	100 days	Unsecured Term, Merchant Cash Advance, Invoice Factoring	To be eligible, you must have been in business for at least 100 days with a minimum of $10,000 in monthly deposits. SharpShooter provides capital to small businesses that are underserved by banks and credit unions. It measures overall business health and potential rather than focusing strictly on traditional metrics. Fill out a simple application and get pre-approved in minutes. Receive your funds within 24 hours.	Go to site More Info	Compare	loading Fetching your data...
OnDeck Business Loan		9.99% – 29.00%	$5,000 - $300,000	6 - 18 months	$100,000/year	6+ months	Secured Term, Line of Credit, Merchant Cash Advance	To be eligible, you must have been in business for at least 6 months with a minimum annual gross revenue of $100,000. OnDeck offers fast and simple financing. Apply in less than 10 minutes with your basic business information and see your loan offers without hurting your credit score. Get approved within 1 business day, and choose your term, amount and payback schedule once approved.	Go to site More Info	Compare	loading Fetching your data...
Loans Canada Business Loan		6.60% - 29.00%	$4,000 - $500,000	3 - 60 months	over $10,000/month	100 days	Unsecured Term	To be eligible, you must have been in business for at least 100 days, have a Canadian business bank account and show a minimum of $10,000 in monthly deposits ($120,000/year). Loans Canada connects Canadian small business owners to lenders offering financing up to $500,000. Complete one simple online application and get matched with your loan options.	Go to site More Info	Compare	loading Fetching your data...
Merchant Growth Business Loan		12.99% - 39.99%	$5,000 - $500,000	3 - 12 months	$10,000 /month	6 months	Unsecured Term, Line of Credit, Merchant Cash Advance	To be eligible, you must have been in business for at least 6 months and have a minimum of $10,000 in monthly sales. Merchant Growth offers financing tailored to business needs. It specializes in providing capital based on future cash flows, but it also offers fixed solutions. Fill out an application within 5 minutes and get your funds within 24 hours.	Go to site More Info	Compare	loading Fetching your data...

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Where can I find a lender that accepts fair credit?

If you have fair credit, you may be able to qualify for a business loan from a variety of lenders.

Online lenders

Lenders that operate online offer a wide range of loans for borrowers with fair credit. These include standard term loans and lines of credit — with rates comparable to banks — and short-term options like invoice financing, invoice factoring and merchant cash advances.

Because of all the options available, it’s important to compare lenders carefully. Fortunately, online lenders typically have lower credit requirements and are more lenient than banks, which can make it easier to qualify for a loan with fair credit.

Banks

Some banks accept business owners with fair credit — provided they have an established credit history. Rates at banks are generally lower, and you may have access to experienced bankers that understand your industry.

But most banks require you to have a chequing account or visit a branch to apply. You’ll also need to meet other strict requirements to qualify, so expect the process of applying with a bank to take longer than an online lender.

Credit unions

Local and regional credit unions generally offer term loans to business members, although you may find other options with your credit union. Requirements tend to be more lenient than banks, but you will still need to meet a minimum credit score to apply.

And like banks, you may need to fill out your paperwork at a branch — though more and more credit unions are moving their initial application process online. Rates are also competitive, but you will need to become a member to qualify for most financing options.

Alternative lenders

Alternative lenders should be used as a last resort if you or your business are unable to qualify for a loan from another source. Because of the fixed-fee structure, alternative loans require daily repayments and may be much more expensive than other loan options. You should consider an alternative business loan carefully before borrowing.

How do I get a business loan with fair credit?

You can improve your chances of approval by keeping these points in mind:

1. Develop a business plan. You should be able to demonstrate why you need funding through a strong business plan. It should show a lender that you know how your funds will be used and how you plan on repaying what your business borrows.
2. Check your credit report. If there are any mistakes on your credit report, you should have them fixed before applying for a business loan — especially if your payment history is incorrect.
3. Gather your paperwork. Lenders want to see tax returns and proof of revenue at minimum. Each application process is different, but you can check with your lenders to ensure you have the documents you need before you apply.
4. Pick the right time. If you’re able, apply during your busy season when you have a few months of strong revenue. This will show your lender that your business is doing well.
5. Prequalify — if possible. Not all lenders offer a prequalification option. But if you can, check your rates with your top choices to avoid a hit to your credit.

Once you have a few prequalification offers, compare the APR, payment schedule and terms to choose the best choice for your business.

6 alternatives to fair credit business loans

These alternatives won’t fault you for having fair credit. But some choices can be expensive for businesses with low revenue.

• Short-term business loans. Short-term business loans are an expensive alternative to term loans. However, borrowers with fair credit may qualify for lower rates. So if you don’t qualify for a traditional term loan, a short-term business loan could be a good alternative.
• Equity financing. Equity financing involves selling partial ownership of your company to an investor. This can take multiple forms, including crowdfunding. Under some circumstances, your investor’s good credit could improve your chances of qualifying for a business loan later.
• Grants. There are federal, provincial and private grants available to businesses that work in specific sectors, employ specific groups of people or serve underserved communities. Your credit score won’t matter since you don’t have to repay your grant funds.
• Business credit cards. These can be used to finance smaller purchases if your business can handle the high APR. There are even business credit cards for owners with fair credit that may be easier to qualify for.
• Personal loans. As a last resort, there are personal loans you can qualify for with fair credit. These won’t offer the best rates, but they can often be used to finance your business.

What should I do if I was denied a business loan?

Your lender should provide information on why you weren’t approved for a loan. Revisit your application and ensure neither you nor your lender made any mistakes. If everything is correct, review the reason you were rejected. Even if you meet a lender’s minimum credit requirements, your business’s revenue and financial history may not meet the lender’s standards.

Rework your application and business plan to suit the feedback you received. If the problem is with your revenue, sales or other metrics, it may be better to consider alternative sources of financing — including short-term business loans, personal loans or business credit cards — which may be easier to qualify for.

Bottom line

Fair credit won’t stop you from qualifying for one of these top business loans. But you should still explore your full range of options to ensure you’re making the right financial move for your business. Learn more about how to improve your business credit here.