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Once we uncover your personalized matches, our team will consult you on the process moving forward.
Here are 10 bad credit business loans
| Lender | NerdWallet Rating▼ | Max loan amount▼ | Min. credit score▼ | Next steps |
|---|---|---|---|---|
Headway Capital - Line of credit with Fundera by NerdWallet | 5.0/5 Best for Fast business loans for bad credit | $100,000 | 625 | with Fundera by NerdWallet |
Fundbox - Line of credit | 5.0/5 Best for Business lines of credit for bad credit | $150,000 | 600 | |
OnDeck - Online term loan with Fundera by NerdWallet | 5.0/5 Best for Short-term business loans for bad credit | $250,000 | 625 | with Fundera by NerdWallet |
Accion Opportunity Fund - Small Business Working Capital Loan | 5.0/5 Best for Long-term business loans for bad credit | $250,000 | 570 | |
Fora Financial - Online term loan with Fundera by NerdWallet | 4.5/5 Best for Startup business loans for bad credit | $1,500,000 | 570 | with Fundera by NerdWallet |
AltLINE - Invoice Factoring | 4.5/5 Best for Invoice factoring for bad credit | $10,000,000 | 300 | |
National Funding - Online Term Loan with Fundera by NerdWallet | 4.0/5 Best for Unsecured business loans for bad credit | $500,000 | 600 | with Fundera by NerdWallet |
Triton Capital - Equipment financing with Fundera by NerdWallet | 4.0/5 Best for Equipment loans for bad credit | $250,000 | 575 | with Fundera by NerdWallet |
Expansion Capital Group Merchant Cash Advance with Fundera by NerdWallet | Best for Working capital loans for bad credit | $300,000 | 500 | with Fundera by NerdWallet |
SBA Microloan with Fundera by NerdWallet | Best for SBA loans for bad credit | $50,000 | 620 | with Fundera by NerdWallet |
Here are 10 bad credit business loans
Best for Fast business loans for bad credit
Best for Business lines of credit for bad credit
Fundbox
Max Amount
$150,000
Min. Credit Score
600
Best for Short-term business loans for bad credit
Best for Long-term business loans for bad credit
Accion
Max Amount
$250,000
Min. Credit Score
570
Best for Startup business loans for bad credit
Best for Invoice factoring for bad credit
AltLINE
Max Amount
$10,000,000
Min. Credit Score
300
Best for Unsecured business loans for bad credit
Best for Equipment loans for bad credit
Best for Working capital loans for bad credit
Best for SBA loans for bad credit
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Our pick for
Fast business loans for bad credit
Headway Capital can fund applications within one business day of approval. You’ll need a minimum credit score of 625 to qualify.
Headway Capital - Line of credit
with Fundera by NerdWallet
Max Loan Amount
$100,000
Min. credit score
625
Est. APR
35.00-80.00%
Headway Capital offers a fast and flexible line of credit for borrowers who may not qualify for more traditional options.
Max loan
$100,000
Min. Credit score
625
Apr range
35.00-80.00%
with Fundera by NerdWallet
Our pick for
Business lines of credit for bad credit
A business line of credit may be available from Fundbox if your credit score is at least 600. You only pay interest on the funds you draw from the credit line, giving you more flexibility than a term loan.
Fundbox - Line of credit
Max Loan Amount
$150,000
Min. credit score
600
Est. APR
36.00-99.00%
Fundbox offers a business line of credit to fill a cash flow gap, and qualifying is easier than with other lenders.
May fund quickly
Max loan
$150,000
Min. Credit score
600
Apr range
36.00-99.00%
Our pick for
Short-term business loans for bad credit
If your credit score is at least 625, you may be able to qualify for an OnDeck loan of up to $250,000. These short-term business loans are good for specific, one-time purchases.
OnDeck - Online term loan
with Fundera by NerdWallet
Max Loan Amount
$250,000
Min. credit score
625
Est. APR
27.20-99.90%
OnDeck offers a fast term loan for small-business owners with less-than-stellar credit who want to expand.
May fund quickly
Max loan
$250,000
Min. Credit score
625
Apr range
27.20-99.90%
with Fundera by NerdWallet
Our pick for
Long-term business loans for bad credit
Nonprofit lender Accion Opportunity Fund focuses on more than just your credit score when determining eligibility. Repayment terms on their loans range from one to five years.
Accion Opportunity Fund - Small Business Working Capital Loan
Max Loan Amount
$250,000
Min. credit score
570
Est. APR
8.49-24.99%
Accion is a good option for businesses that haven't been able to secure traditional financing. The lender targets its funding efforts toward minority, women and low-to-moderate-income entrepreneurs.
Max loan
$250,000
Min. Credit score
570
Apr range
8.49-24.99%
Our pick for
Startup business loans for bad credit
You may be able to qualify for a loan from Fora Financial with a minimum credit score of 570 and just six months in business.
Fora Financial - Online term loan
with Fundera by NerdWallet
Max Loan Amount
$1,500,000
Min. credit score
570
Fora Financial can be a good fit for borrowers who may fall short of qualifying for traditional bank financing or young but established small businesses looking for speedy financing.
Max loan
$1,500,000
Min. Credit score
570
with Fundera by NerdWallet
Our pick for
Invoice factoring for bad credit
AltLINE is an invoice factoring company that will finance unpaid invoices up to $10 million, with no revenue or time in business requirements and no minimum credit score.
AltLINE - Invoice Factoring
Max Loan Amount
$10,000,000
Min. credit score
300
AltLINE offers fast invoice factoring with competitive factoring rates.
Max loan
$10,000,000
Min. Credit score
300
Our pick for
Unsecured business loans for bad credit
National Funding doesn’t require you to put up physical collateral to secure your loan. However, the lender will file a lien on your business assets and require you to sign a personal guarantee.
National Funding - Online Term Loan
with Fundera by NerdWallet
Max Loan Amount
$500,000
Min. credit score
600
Borrowers who can't qualify for more traditional loan options might consider National Funding for fast access to capital.
Max loan
$500,000
Min. Credit score
600
with Fundera by NerdWallet
Our pick for
Equipment loans for bad credit
The equipment you purchase with this type of financing serves as collateral on the loan, meaning online lenders, like Triton, may be more flexible with their credit qualifications.
Triton Capital - Equipment financing
4.0
NerdWallet rating with Fundera by NerdWallet
Max Loan Amount
$250,000
Min. credit score
575
Est. APR
5.99-34.99%
Triton Capital offers fast equipment loans up to $250,000 for businesses in a range of industries.
4.0
NerdWallet rating Max loan
$250,000
Min. Credit score
575
Apr range
5.99-34.99%
with Fundera by NerdWallet
Our pick for
Working capital loans for bad credit
Expansion Capital Group can provide fast access to working capital for borrowers with a minimum credit score of 500. Like all merchant cash advances, however, this product may be expensive.
Expansion Capital Group Merchant Cash Advance
with Fundera by NerdWallet
Max Loan Amount
$300,000
Min. credit score
500
Expansion Capital Group can provide fast and easy financing for newer businesses and borrowers with bad credit.
Max loan
$300,000
Min. Credit score
500
with Fundera by NerdWallet
Our pick for
SBA loans for bad credit
Microloans are offered through nonprofit, community-based organizations, which may be more willing than some other lenders to work with those who have bad to fair credit.
SBA Microloan
with Fundera by NerdWallet
Max Loan Amount
$50,000
Min. credit score
620
Est. APR
8.00-13.00%
SBA microloans are small-sized loans funded by the U.S. Small Business Administration and issued through approved intermediaries, typically nonprofit and community lenders.
Max loan
$50,000
Min. Credit score
620
Apr range
8.00-13.00%
with Fundera by NerdWallet
Our picks for the best business loans for bad credit
Headway Capital
Best for fast business loans for bad credit
Why we picked it: Headway Capital is an online lender that offers a simple application process and flexible requirements. You can find out if you’re eligible for a business line of credit in just minutes. After you’ve been approved, you can receive funds as quickly as the next business day. To qualify, you’ll only need a credit score of
625
, 6
months in business and $50,000 in annual revenue.Read our full Headway Capital review.
Fundbox
Best for business lines of credit for bad credit
Why we picked it: Fundbox provides a flexible business line of credit for borrowers with a credit score of
600
or higher. This revolving line of credit is available in amounts up to $150,000 with repayment terms of 12 or 24 weeks. You can access funds as soon as the next business day after approval — and unlike some credit lines, you won’t pay draw- or account maintenance fees.Read our full Fundbox review.
OnDeck
Best for short-term business loans for bad credit
Why we picked it: OnDeck’s short-term business loan is available in amounts up to $250,000 with repayment terms up to two years. This product can be a good choice for specific, one-time investments in your business. Although OnDeck requires daily or weekly repayment, payments are fixed and don’t change over the course of your loan.
Read our full OnDeck review.
Accion
Best for long-term business loans for bad credit
Why we picked it: Accion issues business loans with repayment terms of up to five years, longer than many other bad credit business loans. Accion is also one of the few lenders on our list to accept credit scores lower than 600. And despite its flexible qualification requirements, Accion offers fairly low interest rates, ranging from
8.49
% to 24.99
%.Read our full Accion review.
Fora Financial
Best for startup business loans for bad credit
Why we picked it: Fora Financial is an online lender that has flexible qualification requirements, making it a good option for startups and borrowers with bad credit. To qualify for a loan, you’ll need a minimum credit score of
570
and at least 6
months in business. Fora also doesn’t require physical collateral, which can be helpful if your business doesn’t have significant assets to offer as security.Read our full Fora Financial review.
AltLINE
Best for invoice factoring for bad credit
Why we picked it: AltLINE offers invoice factoring for business-to-business companies that have outstanding invoices to submit. Like other factoring companies, AltLINE underwrites your application largely based on the creditworthiness of your customers, the age of your receivables and the value of your invoices — as opposed to more traditional requirements. In fact, AltLINE does not set minimum requirements for your personal credit score, time in business or annual revenue. The lender may, however, still consider these factors as part of your application.
Read our full AltLINE factoring review.
Triton Capital
Best for equipment loans for bad credit
Why we picked it: Triton Capital can provide equipment loans of up to $250,000 with repayment terms ranging from one to five years. Because the equipment you purchase serves as collateral on the loan, the lender can work with borrowers who have a minimum credit score of
575
. You should, however, have at least 24
months in business and annual revenue of $250,000. Triton Capital also doesn’t require a personal guarantee, which means your personal assets won’t be at risk with their equipment financing.Read more about equipment financing for bad credit.
Expansion Capital Group
Best for working capital loans for bad credit
Why we picked it: Expansion Capital Group offers fast access to working capital. You can fill out a simple form and receive a quote within 24 hours. Once approved, you can get funding in just two business days. ECG’s merchant cash advance can be a good option for businesses that have strong incoming revenue from debit and credit card sales. Like most MCA providers, however, ECG charges interest as a factor rate, which can be expensive. You’ll want to translate your costs into an APR and compare multiple options to ensure this product is a fit for your business.
Read more about working capital loan options.
SBA microloans
Best for SBA loans for bad credit
Why we picked it: Unlike other SBA loans, SBA microloans are issued by participating intermediaries, such as nonprofit organizations or community lenders. Although these lenders are held to some SBA loan requirements, they have more flexibility with their eligibility criteria. Many SBA microlenders offer loans to traditionally underserved borrowers, including those with bad or limited credit. And with interest rates typically ranging from
8
% to 13
%, SBA microloans can be more affordable than other bad credit loan options.Read more about the SBA microloan program.
What is a bad credit business loan?
A bad credit business loan is a loan that’s targeted toward business owners with poor personal credit. With most traditional lenders like banks, you’ll likely need good personal credit (typically a score of 690 or higher) to qualify, but alternative lenders like online or nonprofit lenders may have lower credit score minimums.
What is a bad credit score?
A bad credit score, by industry standards, typically lands in the range of 300 to 629 (on a scale of 300 to 850). Personal credit scores ranging from 630 to 689 are generally considered fair credit.
There are several factors that can bring down your credit rating, including missed payments or bankruptcies, as well as the age of your credit accounts and the mix of credit types on your report.
Individual small-business lenders may have varying guidelines for what defines a bad credit score; however, bad credit business loans usually cater to borrowers with scores below 630. Although lenders tend to focus on your personal credit score, some may also use your business credit score to evaluate your loan application. Your business credit score reflects your business’s payment history with banks, vendors and other creditors.
Types of bad credit business loans
There are several types of business loans available for bad credit. These loans may have low credit score requirements or include collateral, which can make it easier for bad credit borrowers to qualify.
Here are some of the most common types of bad credit business loans.
Short-term business loans
A short-term business loan is a lump sum of capital you borrow from a lender and repay, over a set period of time, with interest. These loans typically have repayment terms ranging from three to 12 months, but may extend as long as 24 months. Short-term business loans can be used for short-term expenses, as well as specific projects or purchases.
Business lines of credit
Business lines of credit give you access to a set amount of funds, which you can draw from as needed. You only pay interest on the funds you draw, and once you repay what you’ve borrowed, you can continue to draw on the line. A business line of credit may be a good option for working capital needs, managing cash flow gaps or seasonal slows and emergency funding.
Equipment financing
Equipment financing is designed specifically for purchasing equipment or machinery for your business. This is a form of asset-based financing where the equipment you purchase serves as collateral on the loan. Because of this security, you may not need to rely as heavily on traditional eligibility criteria to qualify for equipment financing.
Invoice factoring
Invoice factoring involves selling your outstanding invoices to a factoring company at a discount in exchange for an advance of cash. The factoring company then collects repayment from your customers, and once it receives that payment, it sends you the difference, minus the agreed-upon fees. Invoice factoring companies often have flexible qualification requirements because your invoices provide security on the funding.
Microloans
Microloans are small-dollar loans, typically available in amounts up to $50,000. These loans are generally issued by nonprofit and community organizations who offer flexible qualification requirements. Many microlenders focus their lending efforts specifically on traditionally underserved borrowers, such as those with bad or no credit.
Merchant cash advances
With a merchant cash advance, you receive an upfront sum of capital that you repay using a percentage of your debit and credit card sales, plus a fee. Because MCAs are repaid automatically, merchant cash advance companies tend to focus on sales and cash flow (as opposed to credit history) when evaluating applications. These products can have high annual percentage rates, however, so you’ll want to consider all other options before turning to a merchant cash advance.
Pros and cons of bad credit business loans
Pros
Bad credit business loans help your business access capital you may otherwise not get to boost operations, grow your business or cover gaps in cash flow.
Making payments on a business loan can also help build and improve your business credit, which can help you qualify for more business funding in the future.
Bad credit business loans offer fast access to capital — some within as little as 12 hours of applying.
Cons
Because they are considered higher risk, lenders may not approve high loan amounts on bad credit business loans.
Bad credit business loans typically have higher rates and fees than traditional loans.
You may be asked to pledge collateral on a bad credit business loan to offset some of the lender’s risk.
Where to get a business loan with bad credit
Banks and credit unions likely won’t approve you if you have bad credit. But these alternative sources may let you get a business loan with a less-than-ideal credit history.
Online lenders
Most online lenders require a minimum personal credit score from 500 to 660. But a few have no minimum credit score requirement, focusing on factors like your business’s cash flow instead.
Some factoring companies, for example, don’t require a minimum credit score because their underwriting processes are based largely on the value of your invoices and the creditworthiness of your customers. Similarly, merchant cash advance providers may be particularly flexible with credit score requirements because repayment on their products is automatic, based on your debit and credit card sales.
In general, online lenders offer easier approvals and faster funding than other business lending options, but they typically charge higher rates — even for those with good credit.
CDFIs
A community development financial institution, or CDFI, receives government funding to provide banking access to low-income or underserved communities. CDFIs are often banks and credit unions, but they don’t have the same strict credit requirements for lending that those financial institutions have. If you’re eligible for CDFI financing, you could get a competitive interest rate. Funding can be slower than with online lenders, though.
Nonprofit and community lenders
If you have bad credit, you may be able to get a business loan from a nonprofit- or community lender. Because profit isn’t these organizations’ primary driver, they may be more willing to lend to business owners with a thin or uneven credit history.
Some nonprofit lenders also participate in the SBA microloan program and may work with newer businesses that have rocky credit histories. Many of these lenders focus on issuing loans to traditionally underserved businesses in their communities.
Although nonprofit and community lenders may offer smaller loan amounts than more traditional options, they typically offer competitive interest rates. Most of these lenders also provide educational and support resources for small-business owners, including training and mentoring.
How to get a business loan with bad credit
The higher your credit score, the easier it will be to get a loan, especially one with competitive rates and terms. If your credit score is lower than you’d like, consider taking time to build it up before continuing your search for financing. Credit building strategies include:
- Looking for errors on your credit reports and disputing them with the appropriate credit bureau.
- Making debt payments more frequently.
- Paying down or paying off debt.
If you can’t wait for funding, here are seven steps you can follow to get a business loan with bad credit.
1. Calculate how much debt you can afford
First, you’ll want to determine how much debt you can reasonably afford. Lower credit scores may result in higher interest rates, which can make it difficult to repay a new loan — and leave you worse off financially than you were when you started.
To figure out how much debt you can afford, you should consider how much funding you need, possible interest rates, additional fees, as well as the repayment schedule (daily, weekly or monthly).
Your repayment schedule and term length will dictate the size of your payments, but also how much interest you end up paying. A shorter term means larger payments, but less interest, whereas longer terms mean smaller payments, but more interest over the life of the loan.
2. Check your credit score
If you know that you’ve had credit challenges in the past, it’s more important than ever to know where your score stands before applying for a business loan. You can get a free personal credit score on NerdWallet, as well as pull your credit report from the three major reporting bureaus for free at AnnualCreditReport.com. Established companies should also check their business credit scores from Experian, Equifax and Dun & Bradstreet.
3. Understand additional eligibility requirements
Although business loan requirements vary, most lenders will use similar criteria when evaluating your application. If you have a lower credit score, these other requirements will be even more important to help you access financing.
Most lenders will consider the following:
- How long you’ve been in business.
- What your annual revenue is.
- How strong your cash flow is.
- What kind of collateral you can provide.
4. Research and compare business loan options
You may be able to find bad credit business loans from online or nonprofit lenders. As you explore different options, you should compare them based on available loan types, interest rates, fees and repayment terms.
You’ll also want to consider how fast a lender can provide funds, their reputation and customer service, as well as qualification requirements.
5. Consider offering collateral or adding a cosigner
Once you’re ready to start the application process, you’ll want to prepare to bolster your business profile in any way possible to help increase your chances of approval.
For example, if you have significant collateral available, consider offering more than the minimum — or offer physical collateral even if the lender doesn’t require it. Your business’s strengths may make your application more attractive to lenders, even if your credit score is lagging.
You might also consider finding a cosigner to help you secure a loan. If you default on the loan, the cosigner assumes responsibility for repayment. The cosigner should have a higher credit score and ideally strong personal assets to improve your chances of approval.
6. Gather your documentation and apply
To complete your loan application, you may need to provide some, if not all, of the following:
- Basic information about you and your business.
- Personal and business bank statements.
- Personal and business tax returns.
- Business financial statements.
- Detailed information about your collateral, if applicable.
🤓 Nerdy Tip
Be wary of any lender that tries to rush you through the application process and/or won’t show you terms and rates upfront. Predatory lenders tend to take advantage of businesses that are having trouble getting financing — and they may try to promise guaranteed approval. You should also watch out for red flags such as aggressive phone calls or companies that refuse to answer questions.7. Review your business loan agreement
After you’re approved, your lender will send you a business loan agreement. It’s important to thoroughly review the agreement and make sure you understand all the terms and conditions.
For example, some online lenders will charge interest as a factor rate. You should always try and calculate these rates into an annual percentage rate to get a better sense of how much your loan will cost. You can also try asking your lender for an APR calculation.
It may be helpful to have a business advisor or lawyer read through the agreement as well.
Alternatives to bad credit business loans
If you’re not sure that a bad credit business loan is right for you — or you simply want to explore other options — you might consider the following:
- Small-business grants. Grants provide free access to capital that doesn’t need to be repaid. Grant applications can be competitive, but awarding organizations don’t typically evaluate businesses based on their creditworthiness. You can find business grants from federal and state governments, private corporations and nonprofits.
- Crowdfunding. If your business has a strong customer base or large internet presence, you may be able to leverage your network to get financing. You can use a crowdfunding platform to set up a campaign, providing details about your business and setting a funding goal. Share your campaign with customers, social media followers, friends and family in order to gather donations for your business. In exchange, you typically offer your supporters something in return; you might offer a new product or exclusive access to an event.
- Angel investors. If you have a unique business idea or plan on growing quickly, you might consider looking for investors to finance your company. Angel investors are usually high-net-worth individuals who fund early stage businesses in exchange for equity. These investors often provide business expertise in addition to business capital. You might also find investor companies that allow you to pitch your business with the hope of getting someone in the company’s network to invest. Although these investors may not prioritize your credit score when deciding whether or not to invest, you’ll likely need to be able to show high growth and profitability potential.
Find the right business loan
The best business loan is generally the one with the lowest rates and most ideal terms. But other factors — like time to fund and your business’s qualifications — can help determine which option you should choose. NerdWallet recommends comparing small-business loans to find the right fit for your business.
Last updated on May 2, 2024
Methodology
NerdWallet’s review process evaluates and rates small-business loan products from traditional banks and online lenders. We collect over 30 data points on each lender using company websites and public documents. We may also go through a lender’s initial application flow and reach out to company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.
Our star ratings award points to lenders that offer small-business friendly features, including: transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to business credit bureaus and responsible lending practices. We weigh these factors based on our assessment of which are the most important to small-business owners and how meaningfully they impact borrowers’ experiences.
NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodology for small-business loans and our editorial guidelines.
Frequently Asked Questions
Yes, it’s possible to get a business loan with bad credit. Some online and nonprofit lenders accept borrowers with bad personal credit scores (scores around 300 to 629). Lenders will likely consider factors such as your annual revenue, time in business, cash flow and collateral in addition to your credit score.
A lower credit score may still result in a pricier loan, so building your credit first may qualify you for cheaper options.
Most lenders require a minimum personal credit score ranging from 500 to 660, but some have no minimum requirement. Your annual revenue and time in business may also be considered on your application. You should always shop around and compare your small-business loan options to get one that fits your needs.
Yes, online lenders, CDFIs and microlenders may offer startup business loans to borrowers with bad credit. However, your options will be limited, and they can be expensive. To qualify, you’ll generally need at least six months in business and a minimum credit score of 500 or higher.
You may be able to get an SBA microloan with bad credit. Because SBA microloans are administered through intermediary lenders, their credit score requirements tend to be more flexible.
In general, however, you won’t be able to get other types of SBA loans with bad credit. Although SBA loan credit score requirements vary from lender to lender, a score of 690 or higher will help you access the most options.
It is possible to get a business loan with a 500 credit score from certain lenders like AltLINE or Expansion Capital Group. Be aware that these loans may have collateral requirements, minimum revenue requirements or high fees.
