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Best Business Loans for Bad Credit of December 2024

By Randa Kriss, Olivia Chen
Last updated on December 12, 2024
Edited by Sally Lauckner
Fact checked and reviewed
Even if you have a lower credit score, you may still qualify for certain business loan options.

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If you have bad credit (a score below 630), it’s difficult to get a small-business loan from a bank or credit union. But online and nonprofit lenders offer bad credit business loans to borrowers with personal credit scores as low as 500.

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 9 of the best bad credit business loans

LenderNerdWallet RatingMax loan amountMin. credit scoreNext steps

Fora Financial - Online term loan

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4.7/5

Best for Fast funding

$1,500,000570

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Expansion Capital Group Merchant Cash Advance

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Best for Working capital

$300,000500

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Giggle Finance Merchant Cash Advance

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Best for No credit check

$5,000300

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SBA Microloan

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Best for Low interest rates

$50,000620

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Triton Capital - Equipment financing

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4.0/5

Best for Equipment loans

$250,000575

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Headway Capital - Line of credit

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4.7/5

Best for Startups

$100,000625

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National Funding - Online Term Loan

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4.3/5

Best for Prepayment discounts

$500,000600

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OnDeck - Online term loan

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4.8/5

Best for Short-term loans

$250,000625

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Accion Opportunity Fund - Small Business Working Capital Loan

Read Review
4.9/5

Best for Long-term loans

$250,000600
Read Review

Here are 9 of the best bad credit business loans

Best for Fast funding

Fora Financial

Max Amount

$1,500,000

Min. Credit Score

570

Best for Working capital

Expansion Capital Group

Max Amount

$300,000

Min. Credit Score

500

Best for No credit check

Giggle Finance

Max Amount

$5,000

Min. Credit Score

300

Best for Low interest rates

U.S. Small Business Administration

Max Amount

$50,000

Min. Credit Score

620

Best for Equipment loans

Triton Capital

Max Amount

$250,000

Min. Credit Score

575

Best for Startups

Headway Capital

Max Amount

$100,000

Min. Credit Score

625

Best for Prepayment discounts

National Funding

Max Amount

$500,000

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

600

I'M INTERESTED IN:

Our pick for

Fast funding

You may be able to qualify for a loan from Fora Financial with a minimum credit score of 570. Fora can also offer large loan amounts and funding in as little as 24 hours.

Fora Financial - Online term loan

Read Review

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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.
  • Charges an origination fee.

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

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

Pros

  • Simple application with minimal documentation required.
  • Low minimum credit score requirement.
  • Daily or weekly repayment available.
  • Offers prepayment discounts.

Cons

  • Business assets required as collateral in some cases.
  • Factor rate and fee information not available on website.
  • Charges an origination fee and a monthly servicing fee.

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

Giggle Finance doesn’t require a credit check because eligibility is based on your bank statements. You must have at least three months in business to qualify.

Giggle Finance Merchant Cash Advance

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Max Loan Amount
$5,000
Min. credit score
300

Pros

  • No minimum credit score requirement.
  • Same-day funding available.
  • Specifically designed for freelancers and self-employed individuals.

Cons

  • Funding maxes out at $5,000.
  • Factor rate and fee information not available on website.
  • Charges an origination fee.

Max loan

$5,000

Min. Credit score

300

Giggle Finance provides capital to freelancers, contractors and self-employed individuals.

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Our pick for

Low interest rates

SBA microloans are offered through nonprofit, community-based organizations which can be more willing to work with borrowers with fair or bad credit. Interest rates on these loans typically range from 8% to 13%.

SBA Microloan

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Max Loan Amount
$50,000
Min. credit score
620
Est. APR
8.00-13.00%

Pros

  • Can be used for a variety of funding purposes.
  • Designed to finance traditionally underserved businesses.
  • Startups and business owners with bad credit may be able to qualify.
  • Competitive interest rates, low fees and long repayment terms.
  • Intermediaries typically offer business training and educational resources.

Cons

  • Loan amounts max out at $50,000.
  • Can’t be used to pay existing debt or purchase real estate.
  • Collateral is likely required.
  • Slow funding timeline.

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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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 

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Max Loan Amount
$250,000
Min. credit score
575
Est. APR
6.50-34.99%

Pros

  • Can fund within one to two business days.
  • No prepayment penalty.
  • Flexible repayment options: monthly, quarterly, annually or semiannually.

Cons

  • Charges an origination fee.
4.0
NerdWallet rating 

Max loan

$250,000

Min. Credit score

575

Apr range

6.50-34.99%

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

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Our pick for

Startups

A business line of credit may be available from Headway Capital if your credit score is at least 625. You only need six months in business to qualify.

Headway Capital - Line of credit

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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%

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

Prepayment discounts

If you think you’ll be able to repay your loan quickly, National Funding is a good option. Instead of charging prepayment penalties, the lender offers a discount to borrowers who repay early.

National Funding - Online Term Loan

Read Review

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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: National Funding offers only short-term loans and equipment financing/leasing.
  • Charges an origination fee.

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

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%

Pros

  • Cash can be available within the same business day (does not apply in California or Vermont).
  • Accepts borrowers with a minimum credit score of 625.
  • Streamlined application process with minimal documentation required.
  • Can be used to build business credit.

Cons

  • Cannot fund North Dakota-based businesses.
  • Requires frequent (daily or weekly) repayments.
  • Interest rates can be high compared with traditional lenders.
  • Charges origination fee.
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

Read Review
Max Loan Amount
$250,000
Min. credit score
600
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 with online lenders.
  • Charges an origination fee.
  • Not available in all U.S. states.

Max loan

$250,000

Min. Credit score

600

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.
Read Review

How Much Do You Need?

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A closer look at the best business loans for bad credit

Fora Financial

Best for fast funding
Can be a good option if:
May not be a fit if:
  • You have a personal credit score of at least
    570
    and/or at least
    6
    months in business.
  • You don’t have collateral to secure a loan (or don’t want to risk your assets).
  • You need access to a large amount of funding.
  • You want a discount for prepaying your loan.
  • You want a repayment term longer than 18 months.
  • Your monthly revenue is less than $20,000.
  • You want to build business credit.

Expansion Capital Group

Best for working capital
Can be a good option if:
May not be a fit if:
  • You have a personal credit score in the 500s.
  • You have less than a year in business.
  • You have strong revenue from debit and credit card sales.
  • You want prepayment discounts for repaying early.
  • You can qualify for a merchant cash advance alternative.
  • You want to build business credit.
  • You want to repay funding over an extended period of time.

Giggle Finance

Best for no credit check
Can be a good option if:
May not be a fit if:
  • You’re a freelancer, independent contractor or self-employed.
  • You have less than six months in business.
  • You have a lower credit score and/or want to avoid a credit check.
  • You want almost immediate access to funds.
  • You need more than $5,000 in funding.
  • You don’t want a merchant cash advance, in which repayment comes directly from your sales.
  • You want to build business credit.
  • You don’t want to pay an origination fee.

SBA microloan

Best for low interest rates
Can be a good option if:
May not be a fit if:
  • You want low interest rates on a bad credit business loan.
  • You’re looking for repayment terms of one year or longer.
  • You’re a traditionally underserved business (e.g. startups, those located in low-income areas).
  • You want to build a relationship with a lender that offers business training and other resources.
  • You don’t have collateral to secure your loan (or don’t want to put your assets at risk).
  • You need access to capital within a few days.
  • You’re looking for more than $50,000 in financing.

Triton Capital

Best for equipment loans
Can be a good option if:
May not be a fit if:
  • You’re looking to finance or lease essential business equipment.
  • You want flexible repayment options (e.g. monthly, quarterly, semi-annually).
  • You have a credit score lower than 600.
  • You want competitive interest rates on fast equipment financing.
  • You’re a new business and/or have low revenue.
  • You need an equipment loan of more than $250,000.

Headway Capital

Best for startups
Can be a good option if:
May not be a fit if:
  • You need fast access to working capital.
  • You have less than one year in business.
  • You don’t have collateral to secure a loan (or don’t want to risk your assets).
  • You need more than $100,000 in financing.
  • You don’t want to pay a draw fee.
  • You want to build business credit.

National Funding

Best for prepayment discounts
Can be a good option if:
May not be a fit if:
  • You have less than one year in business.
  • You don’t have collateral to secure a loan (or don’t want to risk your assets).
  • You want a discount for prepaying your loan.
  • Your monthly sales are less than $20,000.
  • You would prefer a monthly repayment schedule.

OnDeck

Best for short-term loans
Can be a good option if:
May not be a fit if:
  • You need funding for a specific business purpose, such as purchasing equipment, buying inventory or expanding your location.
  • You want access to capital (up to $250,000) within a few days.
  • You want to build business credit.
  • You want a term loan with a monthly repayment schedule.
  • You have less than one year in business.

Accion

Best for long-term loans
Can be a good option if:
May not be a fit if:
  • You have a personal credit score of at least
    600
    .
  • You want a bad credit business loan with competitive interest rates.
  • You want to repay your loan over a year or more.
  • You’re a women-, minority- or veteran-owned business.
  • You have less than one year in business.
  • You need access to funds in less than one week.

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.

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 applications requiring fewer documents, 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, 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:

5. Consider offering collateral or adding a cosigner

Once you’re ready to start the application process, 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:
  • Small-business grants. 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. Business credit cards help you pay for everyday company expenses. 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.
  • Crowdfunding. 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.

Frequently asked questions

Last updated on December 12, 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.