Here are 10 of the best bad credit business loans
| Lender | NerdWallet Ratingâ–Ľ | Max loan amountâ–Ľ | Min. credit scoreâ–Ľ | Next steps |
|---|---|---|---|---|
Fora Financial - Online term loan with Fundera by NerdWallet | 4.5/5 Best for Overall bad credit business loan | $1,500,000 | 570 | with Fundera by NerdWallet |
OnDeck - Online term loan with Fundera by NerdWallet | 4.7/5 Best for Short-term loans | $250,000 | 625 | with Fundera by NerdWallet |
Headway Capital - Line of credit with Fundera by NerdWallet | 4.7/5 Best for Fast funding | $100,000 | 625 | with Fundera by NerdWallet |
Fundbox - Line of credit | 4.9/5 Best for Startups | $150,000 | 600 | Read Review |
Expansion Capital Group Merchant Cash Advance with Fundera by NerdWallet | Best for Working capital | $300,000 | 500 | with Fundera by NerdWallet |
AltLINE - Invoice Factoring | 4.4/5 Best for Invoice factoring | $10,000,000 | 300 | Read Review |
Accion Opportunity Fund - Small Business Working Capital Loan | 4.6/5 Best for Long-term loans | $250,000 | 570 | Read Review |
National Funding - Online Term Loan with Fundera by NerdWallet | 4.1/5 Best for Unsecured loans | $500,000 | 600 | with Fundera by NerdWallet |
Triton Capital - Equipment financing with Fundera by NerdWallet | 4.1/5 Best for Equipment loans | $250,000 | 575 | with Fundera by NerdWallet |
PayPal Working Capital Loan | Best for No credit check | $300,000 | 300 | Read Review |
Here are 10 of the best bad credit business loans
Best for Overall bad credit business loan
Best for Short-term loans
Best for Fast funding
Best for Startups
Best for Working capital
Best for Invoice factoring
Best for Long-term loans
Best for Unsecured loans
Best for Equipment loans
Best for No credit check
I'M INTERESTED IN:
Our pick for
Overall bad credit business loan
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 can also offer large loan amounts and fast funding times.
Fora Financial - Online term loan
Max Loan Amount
$1,500,000
Min. credit score
570
Pros
- Cash can be available quickly.
- Get a discount for prepaying.
- No collateral required.
- Low minimum credit score requirement.
Cons
- Charges a factor rate that makes it more difficult to compare costs with other lenders.
- Can’t build business credit.
- Longest loan term is 18 months.
Max loan
$1,500,000
Min. Credit score
570
Our pick for
Short-term loans
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
Max Loan Amount
$250,000
Min. credit score
625
Est. APR
27.20-99.90%
Pros
- Cash can be available within the same business day.
- Accepts borrowers with a minimum credit score of 625.
- Streamlined application process with minimal documentation required.
- Can be used to build business credit.
Cons
- Not available in Nevada, North Dakota or South Dakota.
- Requires frequent (daily or weekly) repayments.
- Interest rates can be high compared with traditional lenders.
- Requires business lien and personal guarantee.
May fund quickly
Max loan
$250,000
Min. Credit score
625
Apr range
27.20-99.90%
Our pick for
Fast funding
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
Max Loan Amount
$100,000
Min. credit score
625
Est. APR
35.00-80.00%
Pros
- Flexible qualification requirements.
- No prepayment penalties.
- Funds available by next business day after approval.
Cons
- Most borrowers are subject to a 2% draw fee.
- Not available in all U.S. states.
Max loan
$100,000
Min. Credit score
625
Apr range
35.00-80.00%
Our pick for
Startups
A business line of credit may be available from Fundbox if your credit score is at least 600. You only need six months in business to qualify.
Fundbox - Line of credit
Max Loan Amount
$150,000
Min. credit score
600
Est. APR
36.00-99.00%
Pros
- Financing available within one business day after approval.
- Simple application with minimal documentation required.
- Startup-friendly — accepts borrowers with a minimum of six months in business.
- Low minimum credit score requirement.
- No prepayment penalties, account maintenance fees or inactivity fees.
Cons
- Rates are high compared with traditional banks.
- May require personal guarantee.
- Weekly repayments required over a short term (maximum of 24 weeks).
May fund quickly
Max loan
$150,000
Min. Credit score
600
Apr range
36.00-99.00%
Our pick for
Working capital
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
Pros
- Simple application with minimal documentation required.
- Low minimum credit score requirement.
- Daily or weekly repayment available.
Cons
- Business assets required as collateral in some cases.
- Factor rate and fee information not available on website.
Max loan
$300,000
Min. Credit score
500
with Fundera by NerdWallet
Our pick for
Invoice factoring
AltLINE is an invoice factoring company that will finance unpaid invoices up to $10 million. Because AltLINE focuses on the creditworthiness of your customers during underwriting, it has no set minimum credit score requirement.
AltLINE - Invoice Factoring
Max Loan Amount
$10,000,000
Min. credit score
300
Pros
- Capital available within 24 to 48 hours.
- No collateral required.
- Manages payment collection from your customers.
- Accepts startups and businesses with bad credit.
Cons
- Fees can become expensive the longer it takes your customers to pay.
- Difficult to compare factoring costs to other types of business loans.
Max loan
$10,000,000
Min. Credit score
300
Our pick for
Long-term loans
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%
Pros
- Loan amounts from $5,000 to $250,000.
- Customized loan terms.
- No prepayment penalty.
Cons
- Slower processing speed compared to online lenders.
- Not available in all U.S. states.
Max loan
$250,000
Min. Credit score
570
Apr range
8.49-24.99%
Our pick for
Unsecured loans
National Funding doesn’t require you to put up physical collateral to secure your loan. You may be able to qualify with a minimum credit score of 600 or higher.
National Funding - Online Term Loan
Max Loan Amount
$500,000
Min. credit score
600
Pros
- Funding in as little as 24 hours.
- Prepayment discounts available.
- Offers loans to startups and borrowers with bad credit.
- No collateral or down payment required.
Cons
- Charges a factor rate that makes it more difficult to compare costs with other lenders.
- Short-term loans require daily or weekly repayment.
- Requires higher annual revenue than other online lenders.
- Misleading website marketing.
Max loan
$500,000
Min. Credit score
600
Our pick for
Equipment loans
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
4.1
NerdWallet rating with Fundera by NerdWallet
Max Loan Amount
$250,000
Min. credit score
575
Est. APR
5.99-34.99%
Pros
- Can fund within one to two business days.
- No prepayment penalty.
- Flexible repayment options: monthly, quarterly, annually or semiannually.
Cons
- Typically requires a personal guarantee and UCC lien.
- Requires high minimum annual revenue.
4.1
NerdWallet rating Max loan
$250,000
Min. Credit score
575
Apr range
5.99-34.99%
with Fundera by NerdWallet
Our pick for
No credit check
PayPal’s working capital loan doesn’t require a credit check because eligibility is based on your PayPal account history. You must have at least $15,000 in annual PayPal sales ($20,000 for Premier accounts) to qualify.
PayPal Working Capital Loan
Max Loan Amount
$300,000
Min. credit score
300
Pros
- No credit check required.
- Low minimum revenue requirements based on PayPal sales.
- Funding available within minutes after approval.
Cons
- Automatic daily repayments deducted as a percentage of your PayPal sales.
- Minimum payment of 5% or 10% of your total loan amount every 90 days.
- Fixed fee structure can make it difficult to compare costs to other loans.
Max loan
$300,000
Min. Credit score
300
A closer look at the best business loans for bad credit
Fora Financial
Best overall for bad credit business loans
Can be a good option if: | May not be a fit if: |
|---|---|
|
|
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.OnDeck
Best for short-term loans
Can be a good option if: | May not be a fit if: |
|---|---|
|
|
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.
Headway Capital
Best for fast funding
Can be a good option if: | May not be a fit if: |
|---|---|
|
|
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 startups
Can be a good option if: | May not be a fit if: |
|---|---|
|
|
Fundbox provides a flexible business line of credit for borrowers with a credit score of
600
or higher and at least 6
months in business. 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.Expansion Capital Group
Best for working capital
Can be a good option if: | May not be a fit if: |
|---|---|
|
|
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.
AltLINE
Best for invoice factoring
Can be a good option if: | May not be a fit if: |
|---|---|
|
|
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.
Accion
Best for long-term loans
Can be a good option if: | May not be a fit if: |
|---|---|
|
|
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 575. And despite its flexible qualification requirements, Accion offers fairly low interest rates, ranging from
8.49
% to 24.99
%. Read our full Accion review.National Funding
Best for unsecured loans
Can be a good option if: | May not be a fit if: |
|---|---|
|
|
National Funding is a private business lender that offers unsecured, short-term loans — meaning you don’t have to provide physical collateral upfront. National Funding also offers a payoff discount if you repay your loan early. These loans can be a good option for borrowers who have a credit score of
600
or higher and at least 6
months in business. Read our full National Funding review.Triton Capital
Best for equipment loans
Can be a good option if: | May not be a fit if: |
|---|---|
|
|
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.PayPal Working Capital Loan
Best for no credit check
Can be a good option if: | May not be a fit if: |
|---|---|
|
|
PayPal’s working capital loan can provide capital of up to $100,000 ($150,000 for repeat borrowers) in just minutes. The loan is repaid as a percentage of your PayPal sales, with a minimum payment required every 90 days. To qualify, you must have a PayPal Business or Premier account for at least 90 days and have processed at least $15,000 in PayPal sales in the last 12 months ($20,000 for Premier accounts). Because eligibility and repayment are based on your PayPal sales, the company does not require a personal credit check. Read our full PayPal business loans review.
What is a bad credit business loan?
A bad credit business loan is a loan that’s targeted toward business owners with bad or limited personal credit. 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.
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.
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.
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 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 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 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 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.
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
Can help your business access capital you may otherwise not get to boost operations, grow your business or cover gaps in cash flow.
Offer fast access to capital — some within as little as 12 hours of applying.
Can help build and improve your business credit (if your lender reports on-time payments), which can help you qualify for more business funding in the future.
Cons
Typically have higher rates and fees than traditional loans.
Borrowing limits are usually lower.
May require collateral to offset lender risk.
Where to get business loans 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. In general, these 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. Although these lenders may offer smaller loan amounts than more traditional options, they typically offer competitive interest rates. Most nonprofit and community organizations also provide educational and support resources for small-business owners, including training and mentoring.
How to get a business loan with bad credit
Here are steps you can follow to get a business loan if you have 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.
🤓 Nerdy Tip
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.
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 bad credit 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:
The type of lender you work with may have an effect on building your credit and maximizing your business’s potential for growth. Online lenders can usually streamline your application and offer fast financing, while a CDFI or nonprofit lender may provide hands-on support and offer additional coaching.
APRs on bad credit business loans can vary widely — ranging anywhere between 5% and 99%. You’ll want to consider the total cost of borrowing, including the interest rate and any fees — origination fees, closing fees or prepayment penalties — associated with the loan. If your lender provides a factor rate, you can calculate your APR by adding the fees to your total loan amount, or multiplying the factor rate by the total loan amount.
Some lenders don’t require physical collateral to secure a loan, but they will place a blanket lien on your assets and ask for a personal guarantee. Lenders may not always be upfront about these two items, so it’s a good idea to ask about them in your research.
Some types of loans and lenders fund much faster than others. Online lenders typically offer ultra-streamlined processes and fast deposits. Other lenders may take a few days to collect and process an application and take longer to fund. No matter which type of lender you choose, if you are on a timeline, it’s prudent to let them know as soon as possible.
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.
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:
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.
Business credit cards help you pay for everyday company expenses. Because card eligibility primarily relies on your personal credit score, business credit cards can be a particularly good option for small amounts of startup funding. If you have a lower credit score, you may still be able to qualify for a secured business credit card — which gives you credit access based on the security deposit you provide.
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 and share it online 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 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.
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.
Last updated on September 10, 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.
To come up with our list of the best bad credit business loans, we selected lenders with a minimum credit score requirement of 629 or lower.
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.
- 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.