$5,000 to $250,000
27.30% Minimum APR offered to at least 5% of customers (not the lowest rate offered)
Up to 24 months
625
OnDeck offers short-term business loans for low-credit borrowers with same-day funding options available in some states. Funds can be used for business expansions, purchasing equipment or inventory, hiring staff, consolidating business debt and more.
Repayment terms go up to 24 months with fixed interest rates, allowing you to manage your budget with no surprises or large upfront costs. OnDeck allows borrowers to pay off their loan early without penalties in some cases, but not all — if you think you may want to pay off your loan early, make sure that’s allowed in your loan agreement.
OnDeck’s interest rates do tend to run higher than some competitors, so compare your options before signing up. Additionally, a personal guarantee might be required.
In order to qualify, you’ll need to meet OnDeck’s criteria of:
$5,000 to $1,500,000
1.15 factor rate Factor rates start at 1.15, but can go as low as 1.10 with early payback provisions
Up to 18 months
570
Fora Financial is one of our top picks for a working capital loan since it offers high funding amounts and flexible repayment terms, with almost no restrictions on how to spend the money. Collateral isn’t required, and funds could be disbursed as quickly as 24 hours after approval.
While some bad credit lenders charge prepayment penalties on business loans, Fora Financial rewards you for paying off your loan early. However, there is an origination fee of 3.00% of the loan amount or $300, whichever is higher. You also need an annual revenue of $240,000 or more to qualify.
In order to qualify, you’ll need to meet Fora Financial’s criteria of:
Up to $250,000
7.80%
6 or 12 months
625
Bluevine offers a flexible line of credit for bad credit borrowers with funds up to $250,000 and no monthly maintenance fees. You can withdraw funds as needed to tackle day-to-day and long-term business expenses, only paying interest on what you use. Funding decisions are typically made within five minutes, and funds could hit your business bank account in as little as 24 hours.
Although the credit score requirements are low, you need a one-year business history and at least $120,000 in annual revenue to qualify.
In order to qualify, you’ll need to meet Bluevine’s criteria of:
Up to $5,000,000
7.90%
12 to 84 months
550
Startup
A bad credit equipment loan from Taycor Financial provides 100% financing with no down payment required, helping you purchase or upgrade essential equipment for your business. With a low minimum credit score and no annual or business history requirements, Taycor Financial is an ideal option for new businesses or those with a limited credit profile.
Taycor Financial offers fast approval times — you could hear back within hours. You have several options for repayment, such as monthly, deferred and semi-annual payments.
Taycor Financial doesn’t have a minimum time in business or annual revenue requirement to qualify for equipment financing.
Up to $500,000
1.11 factor rate
Up to 60 months
600
National Funding offers unsecured business loans with no down payment or collateral required to borrowers with credit scores as low as 600. Funding options include working capital, short-term business loans and equipment financing and leasing.
Rates are competitive, and National Funding also offers an early payoff discount to help business owners save even more.
In order to qualify, you’ll need to meet National Funding’s criteria of:
Up to $150,000
4.66% to 8.99%
4.66% for 12-week terms
8.99% for 24-week terms
3 or 6 months
600
Fundbox provides flexible startup business financing of up to $150,000 to help cover small business startup costs like registering your business, building a website, paying utilities and hiring staff. You only need a business history of three months and $30,000 in annual revenue to qualify.
Once approved, you could receive funds as soon as the next business day, only needing to pay interest on the amount you use. Note that the max repayment term is only 24 weeks, which is relatively short compared to competitors.
In order to qualify, you’ll need to meet Fundbox’s criteria of:
$5,000 to $600,000
1.11 factor rate
Up to 24 months
500
If you’re looking for a quick business loan with lenient eligibility requirements and same-day funding, Credibly offers multiple small business funding solutions to meet your business’s unique needs. You can pick from working capital loans, lines of credit, merchant cash advances, equipment financing, invoice factoring, SBA loans and more.
With loan amounts as high as $600,000 and terms up to 24 months, borrowers can build their business credit with a loan from Credibly. However, you need to generate at least $180,000 in annual revenue to qualify.
In order to qualify, you’ll need to meet Credibly’s criteria of:
Up to $5,000,000
Up to 90%
0.75% factor fee
None
altLINE is an invoice factoring company that provides cash advances in exchange for a company’s unpaid invoices. Although altLINE will run a background and credit check to look for financial-related felonies, it doesn’t impose minimum credit score, annual revenue or business history requirements, making it an excellent option for bad-credit businesses.
As part of the approval process, altLINE will review your outstanding invoices and due dates, as well as your clients’ creditworthiness. After altLINE collects payments on your behalf, you will receive the remaining balance minus the factoring fee (also known as a discount fee).
In order to qualify, you’ll need to meet altLINE’s criteria of:
$5,000 to $250,000
8.49%
12 to 60 months
Not disclosed
Accion Opportunity Fund (AOF) is a nonprofit lender that looks at your business as a whole, versus just your credit score, when making lending decisions. AOF is dedicated to providing affordable loans with flexible terms to diverse business owners who struggle to qualify for traditional business financing. A majority of AOF funds go to minority entrepreneurs, women-owned businesses and low-income businesses.
In addition to loans for businesses with bad credit, AOF offers business classes, coaching, networking opportunities and customer support in English and Spanish, making it a useful resource for immigrant business owners. However, businesses must be based in the U.S. to qualify and loans aren’t available in all states.
In order to qualify, you’ll need to meet Accion Opportunity Fund’s criteria of:
Up to $50,000
Generally 8.00% to 13.00%
Up to 84 months
Varies by lender
Though the SBA microloan doesn’t specify a minimum credit score, it still made our list since it’s designed to help early-stage companies in underserved markets access business financing. Funding amounts go up to $50,000, but the average SBA microloan is only about $13,000. Eligibility requirements tend to be less strict compared to other SBA loan programs, although collateral and a personal guarantee might be required.
While the Small Business Administration guarantees a portion of each microloan and sets the maximum interest rates, you must apply directly with an SBA-approved lender. Contact an intermediary in your area to find a lender that fits your needs.
In order to qualify, you’ll need to meet the SBA’s criteria of:
Most lenders review your personal and business credit scores when determining your eligibility for a small business loan. Having “bad credit” refers to a personal FICO Score below 670. Lenders may focus more on your personal credit history if your business is relatively new.
Bad credit business loans typically require a personal credit score of 500 or higher. Rates tend to be more expensive, although shopping around can help you secure a better deal.
Unfortunately, no-credit-check business loans aren’t available. And although there are no-credit-check personal loans, it’s generally not wise to use personal loans for business purposes.
Businesses with bad credit might struggle to meet typical small business loan requirements for traditional business financing. However, the following lenders can provide funding options for businesses with less-than-ideal credit profiles.
Once you identify a lender that accepts your credit score range, here are seven steps you can take to get a bad-credit business loan.
Low-credit borrowers typically receive steep business loan interest rates, so keep this in mind when deciding how much funding to request. Taking on debt that you can’t afford to repay will only hurt your credit score further.
While securing longer repayment terms could make your payments more affordable, you will likely end up paying more interest over the life of the loan. Short-term loans typically require high payments, but you’ll generally pay less in total interest.
Use our business loan calculator to estimate how much you could borrow.
Before starting the business loan application process, you can check your personal credit score for free with LendingTree Spring. With this information, you’ll better understand which lenders you can approach.
For established companies, you should also obtain copies of your business credit reports.
Here are some ways to boost your credit score to help unlock more attractive business loan rates and terms.
Whether you decide to get a business loan with bad credit or wait until your credit score improves, make sure to stay on top of your payments and keep your eye on your goals. Successfully managing any business loan, bad credit or not, will show lenders that you can handle debt and help you get better rates and terms for future financing needs.
Adding a creditworthy cosigner can often improve your odds of receiving a business loan. However, not all lenders allow cosigners. Furthermore, it’s a big responsibility for your cosigner, since they’ll ultimately be responsible for the loan if your business defaults.
Make sure to discuss the pros and cons with your business partners and your cosigner to ensure everyone knows what’s involved.
While the exact paperwork required to secure a business loan will vary by lender, be prepared to supply some of the following documents:
Applying with these documents could help offset your poor credit and help you appear trustworthy as a borrower. Plus, organizing your paperwork ahead of time could speed up the application and approval process.
Offering business assets as collateral could improve your chances of being approved for financing since lenders can seize the collateral to recoup losses in the case of default.
Acceptable forms of collateral may include hard assets like equipment, fixtures, inventory or commercial property. Future earnings, such as accounts receivable and unpaid invoices, may be used as collateral.
Watch out for loans that may require you to pledge personal assets (your personal car or home, for example) as collateral to secure financing.
Make sure you understand all aspects of your business loan agreement to avoid surprises or penalties down the line. Review these critical components of your loan agreement:
If you’re comfortable with your business loan agreement details, you’re ready to move forward with your bad-credit business loan.
| Pros | Cons |
|---|---|
Access to extra funds: A small business loan can help cover a range of expenses, such as investing in new equipment, covering payroll costs or filling financial gaps during low-earning months. Possibility of raising your credit score: Successfully paying off a bad credit loan can show you’re a reliable borrower. In turn, this might allow you to apply for more affordable financing options. | Higher overall costs: Lenders view applicants with bad credit as riskier borrowers. As a result, they tend to offer higher interest rates, which could negatively impact your business’s financial health. Closer scrutiny: Having bad credit means most lenders will want to scrutinize all your finances, including bank statements, tax returns, invoices and cash flow. May qualify for smaller amounts: Bad-credit loans typically have lower borrowing limits. |
Yes, you may be able to get a business loan if you have bad credit. Several alternative business lenders approve applicants with personal credit scores as low as 500. Make sure you meet a lender’s additional requirements, including time in business or annual revenue.
It’s generally recommended to have a FICO Score in the mid to high 600s when securing small business financing. However, some lenders may accept scores as low as 500, although these loans tend to come with higher rates and fees.
Watch out for advertisements for business loans with no credit check. Reputable business lenders typically run a credit check as part of the application process, even if looking at other factors beyond your credit profile.
The Small Business Administration (SBA) doesn’t set a minimum credit score for securing an SBA loan. However, depending on the type of SBA loan, your lender may require a personal credit score of 680 or higher. The SBA may also require a minimum business credit score of 155 as measured by the FICO Small Business Scoring Service (SBSS). Your chances of receiving an approval increase as your score improves.
Certain types of business financing are better suited for business owners with low credit, such as working capital loans, invoice factoring and merchant cash advances. Financing that requires collateral, like equipment or inventory, may also be easier to obtain because collateral reduces the risk for lenders.
If a bank rejects your loan application, consider applying with another lender. Each lender has different requirements and eligibility criteria, so shop around to find one that’s more receptive to working with your current situation. You should also consider other forms of business financing, such as invoice factoring, accounts receivable factoring and merchant cash advances, as these are typically less dependent on credit.
Getting a bad-credit loan to start a business may be a challenge since many lenders have a minimum time in business requirement. Fortunately, some lenders offer loans to businesses open for just three months and with credit scores as low as 500.
If you still don’t qualify, or if the rates aren’t in your budget, consider business credit cards, borrowing from friends or family or try crowdsourcing the funds. You can even try applying for small business grants — though be prepared for some stiff competition.
