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Best Business Loans for Bad Credit of December 2023

Last updated on November 21, 2023
Edited bySally Lauckner
✅Fact checked and reviewed

⏰ Estimated read time: 9 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 Rating▼Max loan amount▼Min. credit score▼Next 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

Read Review
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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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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AltLINE - Invoice Factoring

4.5/5

Best for Invoice factoring for bad credit

$10,000,000300

Accion Opportunity Fund - Small Business Working Capital Loan

Read Review
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

Read Review

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 Unsecured business loans for bad credit

National Funding

Max Amount

$500,000

Min. Credit Score

600

Best for Invoice factoring for bad credit

AltLINE

Max Amount

$10,000,000

Min. Credit Score

300

Best for Long-term business loans for bad credit

Accion

Max Amount

$250,000

Min. Credit Score

570

Read Review

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

5.0
NerdWallet rating 
Read Review

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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
5.0
NerdWallet rating 

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

5.0
NerdWallet rating 
Read Review
Max Loan Amount
$150,000
Min. credit score
600
Est. APR
10.10-79.80%
Fundbox offers a business line of credit to fill a cash flow gap, and qualifying is easier than with other lenders.
May fund quickly
5.0
NerdWallet rating 

Max loan

$150,000

Min. Credit score

600

Apr range

10.10-79.80%

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

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

5.0
NerdWallet rating 
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
5.0
NerdWallet rating 

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

5.0
NerdWallet rating 

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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.
5.0
NerdWallet rating 

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.

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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

4.5
NerdWallet rating 
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.
4.5
NerdWallet rating 

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

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

4.0
NerdWallet rating 
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.
4.0
NerdWallet rating 

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

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

4.5
NerdWallet rating 
Max Loan Amount
$10,000,000
Min. credit score
300
AltLINE offers fast invoice factoring with competitive factoring rates.
4.5
NerdWallet rating 

Max loan

$10,000,000

Min. Credit score

300

AltLINE offers fast invoice factoring with competitive factoring rates.

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

4.0
NerdWallet rating 
Read Review
Max Loan Amount
$250,000
Min. credit score
570
Est. APR
7.49-29.67%
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.
4.0
NerdWallet rating 

Max loan

$250,000

Min. Credit score

570

Apr range

7.49-29.67%

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.
Read Review

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

Read Review

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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.
» MORE: Curious about your business credit score?

Types of bad-credit business loans

Here are some of the most common types of bad-credit business loans.
Loan type
Overview
Use cases
Short-term loan
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.
Line of credit
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.
Equipment financing
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.
Invoice factoring
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.
Merchant cash advance
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.
Revenue-based financing
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.

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.
» MORE: Best business loans for startups with bad credit

How to get a business loan with bad credit

It’s possible to get a business loan even if you have bad credit. Here are steps you can follow to access the financing your business needs.

1. Check your credit

Before applying for a small-business loan, check your credit to know what lenders are going to see. You can get a free credit score on NerdWallet, and pull your personal credit report from the three major reporting bureaus for free at AnnualCreditReport.com. Business credit scores are available from Experian, Equifax and Dun & Bradstreet.

2. Build up your credit, if possible

If your credit score is lower than you’d like, consider ways to build it up before applying for business financing. For example, look for any errors on your credit reports and dispute them with the appropriate credit bureau. Other credit-strengthening strategies can include making payments more often and paying down or paying off debt, which can build your business credit as well.

3. Calculate how much debt you can afford

It’s important to note that a low credit score may result in a higher interest rate, which could make it difficult to repay a new loan — and leave you worse off financially than you were when you started.
Therefore, you’ll want to determine how much debt you can reasonably afford before searching for loan options. 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.
» MORE: Estimate loan cost with NerdWallet’s business loan calculator

4. Understand your eligibility requirements

Even if you have a less-than-perfect credit score, you may still qualify for a business loan. However, before comparing different types of bad-credit business loans, it’s helpful to understand the criteria lenders will use to evaluate your business.
In addition to your credit score, small-business lenders are likely to 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.

5. Prepare to bolster your application

You should be prepared to emphasize the areas where your business is successful in your loan application. For example, if you have significant collateral available, consider offering more than the minimum — or offer 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.
On the other hand, the reasons behind your low credit score may influence a lender’s decision. For instance, it will likely be harder to get approved if a recent bankruptcy or loan default is what’s dragging your score down.

6. Consider adding a cosigner

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.

7. Talk to a loan officer

If you end up working with a loan officer, they are likely going to ask about your credit profile as a part of the process. Be preemptive in addressing poor credit so you appear honest, and so you and your loan officer can potentially strategize ways around any bad marks. Excessive credit card debt, for example, is different than a bankruptcy or a tax lien, so being open to discussing your credit is important.

8. Shop around and choose the best loan option for your business

Although a lower credit score may mean you have fewer options to choose from, you should still shop around and compare loan products.
As you research different lenders and their offerings, you’ll want to consider the following factors to find the right fit for your needs:
  • Available loan types.
  • Interest rates and fees.
  • Repayment terms.
  • Funding speed.
  • Qualification requirements.
  • Lender reputation.
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.
» MORE: How to apply for and get a business loan

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 November 21, 2023

Methodology

NerdWallet reviewed traditional and online lenders to create our list of the best small-business loans for bad credit.
Our list includes various loan options to meet the diverse funding needs of small-business owners, with an emphasis on lenders that offer a streamlined underwriting and approval process.
Each small-business loan option on our 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.

Frequently Asked Questions