Key takeaways
- A 500 credit score won’t disqualify you from business financing, but it will narrow your options to alternative lenders. They may offer microloans, invoice factoring or merchant cash advances.
- These options will likely have higher interest rates and shorter repayment terms than more traditional products.
- Offering collateral or a cosigner can quickly strengthen a low-credit application, as they give lenders an immediate way to offset their risk.
It is possible to get a small-business loan with a 500 credit score, but your options will be limited. Only 6.17% of borrowers approved through NerdWallet Small Business between April 2025 and March 2026 reported a credit score below 620. That’s because a lower credit score makes you a riskier borrower, so lenders will charge higher interest rates and offer shorter terms than they do to those with stronger credit.
This guide outlines the best business loan options available with a 500 credit score and shares ways to strengthen your chances of qualifying.
How much do you need?
We'll start with a brief questionnaire to better understand the unique needs of your business. Once we uncover your personalized matches, our team will consult you on the process moving forward.
Types of business loans for a 500 credit score
A 500 credit score falls in the “poor” range (FICO scores below 580) and typically signals a history of late or missed payments, high balances relative to your limits, collections or a thin credit file. Traditional lenders interpret this as a high risk of default, which is why they charge higher interest rates, shorten repayment terms or simply deny your application.
As a result, you’ll have to turn to online or community lenders, which tend to be more flexible with their qualification requirements. Some of these lenders underwrite your application largely based on revenue or receivables, instead of credit history.
Here are some of the common loan types available to borrowers with lower credit scores:
- Microloans. These loans are typically offered by nonprofit or community lenders, which focus on traditionally underserved businesses. Microloans are usually available in amounts up to $50,000 and function like term loans. Although these loans may have shorter repayment terms and higher interest rates than traditional business loans, they’ll likely be the most competitive option for borrowers with a 500 credit score.
- Invoice factoring. Invoice factoring isn’t technically a loan — instead, you’re selling your outstanding invoices to a factoring company in exchange for an advance of capital. The company then collects payment on your invoices. Once it does, it sends you the difference minus its fees. Eligibility for invoice factoring is usually based on the creditworthiness of your customers, as well as the value of your invoices — as opposed to your credit score and other traditional requirements.
- Merchant cash advances (MCAs). Similar to invoice factoring, MCAs aren’t really business loans. With an MCA, you receive an upfront sum of cash that you repay using a percentage of your debit and credit card sales, plus a fee. Because repayment comes from your card sales, MCA companies usually focus on those transactions, or your business revenue, when evaluating your application. As a result, many MCA providers accept borrowers with lower credit scores. Merchant cash advances are often one of the most expensive forms of business financing, however, and should be considered a last-resort option.
- Payment processor loans. Also known as merchant financing, these loans are issued by companies that process customer payments, like PayPal or Square, usually exclusively to their customers. Repayment is collected directly from the seller accounts (similar to the way an MCA works) and approval is based on your sales with the processor.
Best business loans for a 500 credit score
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| Product | Min Credit | Max Loan Amount | |
|---|---|---|---|
 PayPal Working Capital Loan with NerdWallet Small Business | 300 | $300,000 | with NerdWallet Small Business |
 Giggle Finance - Merchant cash advance with NerdWallet Small Business | 300 | $15,000 | with NerdWallet Small Business |
 Expansion Capital Group - Merchant cash advance with NerdWallet Small Business | 500 | $500,000 | with NerdWallet Small Business |
 Uplyft Capital- Merchant cash advance with NerdWallet Small Business | 500 | $500,000 | with NerdWallet Small Business |
 AltLINE - Invoice factoring Nerdwallet Rating 4.4 with NerdWallet Small Business | 300 | $5,000,000 | with NerdWallet Small Business |
 Kiva U.S. - Microloan | 300 | $15,000 |
A closer look at our top picks
If you qualify for a microloan or invoice factoring, start with those options as they’ll likely be cheaper than a merchant cash advance. But if you have no unpaid invoices or can’t wait for a microloan, an MCA may be your only realistic option. Here’s how to compare our picks.
❗Keep in mind, these products aren’t priced the same way. Microloans use interest rates, invoice factoring uses factoring fees and MCAs use factor rates — which can translate into high APRs. Before signing, convert any factor rate into an APR, so you can compare true costs side by side.
Kiva
Best for microloans
Kiva U.S.Kiva U.S. - Microloan
Min Credit
300🔍 Overview:
Kiva is a nonprofit microlender that offers interest-free loans of up to $15000. To get a loan from Kiva, you must create a crowdfunding campaign and gather support from your community. After your friends and family provide initial funding, you’ll expand your campaign onto the Kiva platform, where anyone can lend you money. Once your fundraising is complete, you receive your loan and have between 12 and 36 months to repay it.
✅ Requirements:
- Must live and do business in the U.S.
- Must be 18 years or older.
- Must have a PayPal account.
- Must be able to demonstrate your social capital by asking friends, family or customers to donate to you during the private fundraising period.
Kiva does not set any minimum credit score, annual revenue or time in business requirements.
AltLINE
Best for B2B businesses
🔍 Overview:
AltLINE allows business-to-business companies to factor up to $5 million in invoices per month. The lender will accept invoices that are outstanding for up to 90 days. You can receive funds within 24 to 48 hours of invoice submission.
✅ Requirements:
- Minimum credit score: No minimum
- Minimum time in business: No minimum.
- Minimum annual revenue: No minimum.
Instead of focusing on traditional business loan requirements, AltLINE largely underwrites your application based on the creditworthiness of your customers, the age of your receivables and the value of your invoices.
Giggle Finance
Best for no credit check
Giggle FinanceGiggle Finance - Merchant cash advance
Min Credit
300🔍 Overview:
Giggle Finance offers merchant cash advances up to $15000 (repeat customers may receive up to $20,000). You may be able to access financing as soon as the same day. Unlike most online lenders, Giggle does not check your personal credit score when evaluating your application. Approval is based on your business income and revenue streams.
✅ Requirements:
- Minimum credit score: No minimum.
- Minimum time in business: 3 months.
- Minimum annual revenue: $18000 (at least $1,500 per month).
Expansion Capital Group
Best for fast financing
Expansion Capital GroupExpansion Capital Group - Merchant cash advance
Min Credit
500with NerdWallet Small Business
🔍 Overview:
Expansion Capital Group issues merchant cash advances up to $500000. Advances are repaid between 3 and 12 months. You may be able to receive funding on the same day you’re approved.
✅ Requirements:
- Minimum credit score: 500.
- Minimum time in business: 6 months.
- Minimum annual revenue: $96000 (at least $8,000 per month).
Uplyft Capital
Best for no personal guarantee
Uplyft CapitalUplyft Capital- Merchant cash advance
Min Credit
500🔍 Overview:
You can get a merchant cash advance from Uplyft Capital in amounts up to $5 million. Funding is available within 24 to 48 hours. Unlike most other lenders, Uplyft does not require you to sign a personal guarantee.
✅ Requirements:
- Minimum credit score: 500.
- Minimum time in business: 3 months.
- Minimum annual revenue: $120000.
PayPal Working Capital
Best for PayPal users
🔍 Overview:
The PayPal Working Capital loan offers eligible PayPal users funding up to $200,000 (up to $300,000 for repeat borrowers). The loan functions like a merchant cash advance: You repay the funds using a percentage of your PayPal sales, and a minimum payment is required every 90 days. Because eligibility is based on your account history, PayPal does not check your credit when evaluating your application. In fact, you can apply and receive funds in minutes if approved.
✅ Requirements:
- Must have a PayPal Premier or PayPal Business account for at least 90 days.
- At least $15,000 in PayPal sales in the past year ($20,000 for Premier accounts).
- No minimum credit score requirement. PayPal doesn’t perform a credit check because the loan is based on your PayPal account history.
🤓 Nerdy Tip
Although there are reputable lenders (like the ones on our list) that offer business loans for a 500 credit score, there are also bad actors who try to take advantage of bad-credit borrowers who need funding. As you compare options, keep an eye out for red flags, such as lenders who:
- Request money upfront.
- Guarantee your approval.
- Rush you through the application process.
- Pressure you to sign the loan.
- Offer terms that are too good to be true.
How to get a business loan with a 500 credit score
If you have a 500 credit score, there are actions you can take to advance your chances of getting approved:
Work to strengthen your credit score, if possible
Building your credit can take time, so it may not be feasible if you need funding right now. But, helping your credit score grow can help you qualify for more loan options, as well as better interest rates and repayment terms.
Some simple credit-building strategies include:
- Look for errors on your credit reports (e.g., payments marked late when you paid on time, someone else's credit activity mixed with yours) and dispute them with the appropriate credit bureau.
- Make debt repayments more frequently.
- Get added as an authorized user on a credit card of someone you know and trust who has a strong credit score.
Offer collateral
Collateral is a physical asset, such as equipment or real estate, that’s used to secure a business loan. If you default on the loan, the lender can claim your collateral to recover its losses. Offering collateral — or providing more than is required — can help bolster your application. Even though you may not have the best credit score, collateral gives the lender a backup repayment method, which lowers its risk and makes approval more likely.
Add a cosigner
A cosigner with strong credit can strengthen your loan application by offsetting your low credit score. A business loan cosigner is usually a trusted person (like a friend or family member) who agrees to take over payments if you can’t. Keep in mind that this agreement can strain your relationship if you miss payments. Your cosigner is legally responsible for the debt.
Provide a comprehensive business plan
If you have a lower credit score, you need to do everything you can to strengthen your application — and show the lender that you’ll be able to repay the loan. A well-thought-out business plan can help persuade lenders that your company has staying power and is a worthwhile investment.
Your business plan for a loan should cover your products or services, a market analysis and financial statements and projections. It should also include a funding request that explains how much capital you need, why you need it and how you plan to repay it.
➡️ Want to see multiple options at once? Submit a single application through NerdWallet Small Business and compare offers in one place — with no impact to your credit score.
Article sources
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- 1.NerdWallet. 2026 NerdWallet Business Loan Study.
