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Best Business Loans for Bad Credit of March 2024

By Ryan Lane, Randa Kriss
Last updated on February 7, 2024
Edited bySally Lauckner
Fact checked and reviewed

⏰ Estimated read time: 10 minutes

Online lenders can provide small-business loans for borrowers with bad credit. Rates are typically higher than on bank loans.

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If your credit isn’t great, it can be difficult to get a loan from a bank or credit union. But alternative sources, like online and nonprofit lenders, can offer bad-credit business loans to borrowers with personal credit scores as low as 500.
Interest rates on these products are often higher than on traditional small-business loans, so you’ll want to shop around to get the best terms possible and make sure the payments will be manageable for your business.
Below, you’ll find our picks for the best business loans for bad credit — a score of around 300 to 629 — plus information on how to qualify for financing.

How much do you need?

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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.

Here are 10 bad-credit business loans

LenderNerdWallet RatingMax loan amountMin. credit scoreNext steps

OnDeck - Online term loan

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5.0/5

Best for Short-term business loans for bad credit

$250,000625

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Fundbox - Line of credit

5.0/5

Best for Business lines of credit for bad credit

$150,000600
Read Review

Bluevine - Line of credit

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5.0/5

Best for Fast business loans for bad credit

$250,000625

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Headway Capital - Line of credit

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5.0/5

Best for Easy business loans for bad credit

$100,000625

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Fora Financial - Online term loan

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4.5/5

Best for Working capital loans for bad credit

$1,500,000500

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AltLINE - Invoice Factoring

4.5/5

Best for Invoice factoring for bad credit

$10,000,000300
Read Review

National Funding - Online Term Loan

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4.0/5

Best for Unsecured business loans for bad credit

$500,000600

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Accion Opportunity Fund - Small Business Working Capital Loan

4.0/5

Best for Long-term business loans for bad credit

$250,000570
Read Review

Triton Capital - Equipment financing

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4.0/5

Best for Equipment loans for bad credit

$250,000575

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SBA Microloan

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Best for SBA loans for bad credit

$50,000620

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Here are 10 bad-credit business loans

Best for Short-term business loans for bad credit

OnDeck

Max Amount

$250,000

Min. Credit Score

625

Best for Business lines of credit for bad credit

Fundbox

Max Amount

$150,000

Min. Credit Score

600

Best for Fast business loans for bad credit

Bluevine

Max Amount

$250,000

Min. Credit Score

625

Best for Easy business loans for bad credit

Headway Capital

Max Amount

$100,000

Min. Credit Score

625

Best for Working capital loans for bad credit

Fora Financial

Max Amount

$1,500,000

Min. Credit Score

500

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

National Funding

Max Amount

$500,000

Min. Credit Score

600

Best for Long-term business loans for bad credit

Accion

Max Amount

$250,000

Min. Credit Score

570

Best for Equipment loans for bad credit

Triton Capital

Max Amount

$250,000

Min. Credit Score

575

Best for SBA loans for bad credit

U.S. Small Business Administration

Max Amount

$50,000

Min. Credit Score

620

I'M INTERESTED IN:

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

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Max Loan Amount
$250,000
Min. credit score
625
Est. APR
35.40-99.90%
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

35.40-99.90%

OnDeck offers a fast term loan for small-business owners with less-than-stellar credit who want to expand.
Read Review

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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%

Fundbox offers a business line of credit to fill a cash flow gap, and qualifying is easier than with other lenders.

Our pick for

Fast business loans for bad credit

Bluevine can approve applications and offer financing in as little as 24 hours. You’ll need a minimum credit score of 625 to qualify.

Bluevine - Line of credit

Read Review

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Max Loan Amount
$250,000
Min. credit score
625
Est. APR
20.00-50.00%
Bluevine's line of credit provides fast working capital for short-term borrowing needs.
May fund quickly

Max loan

$250,000

Min. Credit score

625

Apr range

20.00-50.00%

Bluevine's line of credit provides fast working capital for short-term borrowing needs.
Read Review

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Our pick for

Easy business loans for bad credit

You may be able to qualify for a line of credit from Headway with a minimum credit score of 625. The lender offers a streamlined application and other flexible qualifications.

Headway Capital - Line of credit

Read Review

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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%

Headway Capital offers a fast and flexible line of credit for borrowers who may not qualify for more traditional options.
Read Review

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Our pick for

Working capital loans for bad credit

If you have a credit score of 500 or higher, you may be able to qualify for a working capital loan. You can use a loan from Fora Financial to purchase inventory, make payroll or manage cash flow gaps.

Fora Financial - Online term loan

Read Review

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Max Loan Amount
$1,500,000
Min. credit score
500
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

500

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.
Read Review

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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

AltLINE offers fast invoice factoring with competitive factoring rates.

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

Read Review

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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

Borrowers who can't qualify for more traditional loan options might consider National Funding for fast access to capital.
Read Review

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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
8.49-29.67%
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

8.49-29.67%

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.

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 

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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%

Triton Capital offers fast equipment loans up to $250,000 for businesses in a range of industries.

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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

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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%

SBA microloans are small-sized loans funded by the U.S. Small Business Administration and issued through approved intermediaries, typically nonprofit and community lenders.
Read Review

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How Much Do You Need?

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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

Here are some of the most common types of bad-credit business loans.
Loan type
Overview
Use cases
Lump sum of capital you borrow from a lender and repay, over a set period of time, with interest. Online lenders tend to have flexible qualification requirements.
Short-term expenses, specific projects or purchases.
Gives you access to a set amount of funds, which you can draw from as needed. Lines of credit are also available from online lenders with flexible requirements.
Working capital, cash flow gaps, seasonal slows, emergency funding.
Asset-based financing where the equipment you purchase serves as collateral on the loan. You may not need to rely as heavily on traditional eligibility criteria because equipment secures the loan.
Purchasing equipment and machinery for your business.
Unpaid invoices are sold to a factoring company at a discount in exchange for a cash advance. Lenders can be lenient with qualifications because your invoices provide security.
Business-to-business companies that have cash tied up in unpaid invoices.
Company gives you an upfront sum of capital that you repay using a percentage of your debit and credit card sales, plus a fee. MCA companies tend to focus on sales and cash flow when evaluating applications.
Businesses that have substantial debit and credit card sales. However, MCAs can have extremely high APRs, so they should be used as a last resort option.
Loans are underwritten to future revenue, and payments are a percentage of monthly revenue. Revenue-based loans rely less on personal credit and finances because your payments are guaranteed by monthly revenue.
High-revenue businesses that are experiencing cash flow shortages, or are looking to scale and grow.
Small-dollar loans, typically available in amounts up to $50,000. Issued by nonprofit and community organizations who often have flexible qualification requirements.
Day-to-day expenses associated with starting and/or growing a business. Can be a good option for traditionally underserved businesses.

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. 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.

Microlenders

If you have bad credit, you may be able to get a microloan for your business. Microloans typically come from nonprofits. 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 microlenders 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.
The downside of a microloan is right in its name: micro. Funds typically top out at $50,000, which may not be enough for your company’s needs.

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.
Be wary of any lender that tries to rush you through the application process and/or won’t show you loan 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 or loans with no credit check.

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

Unlike business loans, small-business 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. With crowdfunding, you use a crowdfunding platform to set up a campaign, providing details about your business and setting a funding goal.
You then 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 equity in your company or a reward, like a new product or exclusive access to an event.

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, for example, are usually high net worth individuals that fund early stage businesses in exchange for equity. These investors often provide business expertise in addition to 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 February 7, 2024

Methodology

NerdWallet’s review process evaluates and rates small-business loan products from both traditional and online lenders.
We collect over 30 data points on each lender, taking into account features we consider to be small-business friendly, 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.
Each bad-credit business loan option on this list meets the following criteria:
- Maximum loan amount of at least $50,000.
- Transparent rates and repayment terms.
- Funding available within two weeks of applying.
- Personal credit score requirements of 625 or below.
- No more than two years in business required.

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