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Best Business Loans for Bad Credit of June 2024

By Randa Kriss, Olivia Chen
Last updated on June 14, 2024
Edited bySally Lauckner
Fact checked and reviewed
Online- and non-bank 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 best bad credit business loans

LenderNerdWallet RatingMax loan amountMin. credit scoreNext steps

Headway Capital - Line of credit

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5.0/5

Best for Fast funding

$100,000625

with Fundera by NerdWallet

Fundbox - Line of credit

5.0/5

Best for Business lines of credit

$150,000600
Read Review

OnDeck - Online term loan

with Fundera by NerdWallet

5.0/5

Best for Short-term loans

$250,000625

with Fundera by NerdWallet

Accion Opportunity Fund - Small Business Working Capital Loan

5.0/5

Best for Long-term loans

$250,000570
Read Review

Fora Financial - Online term loan

with Fundera by NerdWallet

4.5/5

Best for Startups

$1,500,000570

with Fundera by NerdWallet

AltLINE - Invoice Factoring

4.5/5

Best for Invoice factoring

$10,000,000300
Read Review

National Funding - Online Term Loan

with Fundera by NerdWallet

4.0/5

Best for Unsecured business loans

$500,000600

with Fundera by NerdWallet

Triton Capital - Equipment financing

with Fundera by NerdWallet

4.0/5

Best for Equipment loans

$250,000575

with Fundera by NerdWallet

Expansion Capital Group Merchant Cash Advance

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Best for Working capital

$300,000500

with Fundera by NerdWallet

PayPal Working Capital Loan

Best for No credit check

$250,000580
Read Review

Here are 10 best bad credit business loans

Best for Fast funding

Headway Capital

Max Amount

$100,000

Min. Credit Score

625

Best for Business lines of credit

Fundbox

Max Amount

$150,000

Min. Credit Score

600

Best for Short-term loans

OnDeck

Max Amount

$250,000

Min. Credit Score

625

Best for Long-term loans

Accion

Max Amount

$250,000

Min. Credit Score

570

Best for Startups

Fora Financial

Max Amount

$1,500,000

Min. Credit Score

570

Best for Invoice factoring

AltLINE

Max Amount

$10,000,000

Min. Credit Score

300

Best for Unsecured business loans

National Funding

Max Amount

$500,000

Min. Credit Score

600

Best for Equipment loans

Triton Capital

Max Amount

$250,000

Min. Credit Score

575

Best for Working capital

Expansion Capital Group

Max Amount

$300,000

Min. Credit Score

500

Best for No credit check

PayPal

Max Amount

$250,000

Min. Credit Score

580

I'M INTERESTED IN:

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

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

with Fundera by NerdWallet

Our pick for

Business lines of 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

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

Read Review

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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%

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

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%
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%

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

Startups

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

Read Review

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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

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

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

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

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

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

with Fundera by NerdWallet

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

4.0
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%

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

with Fundera by NerdWallet

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

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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

Expansion Capital Group can provide fast and easy financing for newer businesses and borrowers with bad credit.

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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
$250,000
Min. credit score
580
The PayPal Working Capital loan can help low-revenue business owners (with a PayPal account) access fast financing.

Max loan

$250,000

Min. Credit score

580

The PayPal Working Capital loan can help low-revenue business owners (with a PayPal account) access fast financing.

How Much Do You Need?

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Our picks for the best business loans for bad credit

Headway Capital

Best for fast funding
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.

Fundbox

Best for business lines of 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 loans
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 loans
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 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.

Fora Financial

Best for startups
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
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.

Triton Capital

Best for equipment loans
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.

Expansion Capital Group

Best for working capital
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.

PayPal Working Capital Loan

Best for no credit check
Why we picked it: 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.

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.

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.

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.

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.

Tips for improving your credit score

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.

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:

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.

Frequently asked questions

Last updated on June 14, 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. - 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.
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