Best Startup Business Loans for Bad Credit
Best Startup Business Loans for Bad Credit
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Expansion Capital Group - Merchant cash advance
Best for easy approval
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.
Expansion Capital Group - Merchant cash advance
Best for easy approval
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.
Giggle Finance - Merchant cash advance
Best for small-dollar merchant cash advances
Max loan amount
$10,000
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 $10,000 ($20,000 for repeat customers).
- Factor rate and fee information not available on website.
- Charges an origination fee.
Giggle Finance - Merchant cash advance
Best for small-dollar merchant cash advances
Max loan amount
$10,000
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 $10,000 ($20,000 for repeat customers).
- Factor rate and fee information not available on website.
- Charges an origination fee.
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.
Fora Financial - Online term loan
Best for short-term loans
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 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.
OnDeck - Online term loan
Best for no collateral requirements
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.
Max loan amount
$150,000
Min. credit score
600
Est. APR
36.00-99.00%
Pros
- Financing available within one business day after approval.
- Simple application with minimal documentation required.
- Low minimum credit score, time in business and annual revenue requirements.
- No prepayment penalties, account maintenance fees or inactivity fees.
Cons
- Rates are high compared with traditional banks.
- Weekly repayments required over a short term (maximum of 24 weeks).
Fundbox - Line of credit
Best for quick funding
Max loan amount
$150,000
Min. credit score
600
Est. APR
36.00-99.00%
Pros
- Financing available within one business day after approval.
- Simple application with minimal documentation required.
- Low minimum credit score, time in business and annual revenue requirements.
- No prepayment penalties, account maintenance fees or inactivity fees.
Cons
- Rates are high compared with traditional banks.
- Weekly repayments required over a short term (maximum of 24 weeks).
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.
Accion Opportunity Fund Small Business Working Capital Loan
Best for low revenue
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 amount
$150,000
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.
- 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.
National Funding - Equipment financing
Best for equipment financing
Max loan amount
$150,000
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.
- 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 amount
$5,000,000
Min. credit score
300
Pros
- Capital available within 24 to 48 hours.
- No collateral required.
- Manages payment collection from your customers.
- Accepts startups and businesses with bad credit.
Cons
- Fees can become expensive the longer it takes your customers to pay.
- Difficult to compare factoring costs to other types of business loans.
- Charges an origination fee.
AltLINE - Invoice factoring
Best for invoice factoring
Max loan amount
$5,000,000
Min. credit score
300
Pros
- Capital available within 24 to 48 hours.
- No collateral required.
- Manages payment collection from your customers.
- Accepts startups and businesses with bad credit.
Cons
- Fees can become expensive the longer it takes your customers to pay.
- Difficult to compare factoring costs to other types of business loans.
- Charges an origination fee.
Kiva U.S. - Microloan
Best for zero-interest loans
Max loan amount
$15,000
Min. credit score
300
Pros
- Reports to credit bureaus, which can help you build business credit.
- Don’t need to meet credit, time in business, or annual revenue requirements to qualify.
Cons
- Funding can take weeks and depends on your fundraising efforts.
Kiva U.S. - Microloan
Best for zero-interest loans
Max loan amount
$15,000
Min. credit score
300
Pros
- Reports to credit bureaus, which can help you build business credit.
- Don’t need to meet credit, time in business, or annual revenue requirements to qualify.
Cons
- Funding can take weeks and depends on your fundraising efforts.
Concerned about tariffs?
Many small-business owners are under increased economic stress and uncertainty following the latest tariff announcements. NerdWallet is here to help you find answers for whatever you're looking for. Here are some resources to help you get started:
- Need emergency funding? Consider a business line of credit.
- Looking for fast access to working capital? Discover the best working capital loans.
- Want tips on how to mitigate the impact of tariffs? Read our guide.
Expansion Capital Group
Best for easy approval
Who should consider it: Businesses that want a fast and simple application process.
Expansion Capital Group offers merchant cash advances with relatively lenient qualification requirements — only a
500
credit score and 6
months in business — and funding amounts up to $300,000. It also offers prepayment discounts, which helps you save money if you can repay your advance early.Giggle Finance
Best for small-dollar merchant cash advances
Who should consider it: Borrowers who only need a small amount of money.
For startups that need a small amount of cash quickly, Giggle’s instant funding may be a helpful option. There is no minimum credit score requirement, and you only need an average of $3,000 in monthly revenue over the past three months, making it a great option for startups that aren’t raking in cash yet. The factor rates, (ranging from 1.15 to 1.52), and high origination fees make this funding expensive; however, given the small loan amounts and flexible repayment schedules, it may work if you can’t qualify for other funding.
Fora Financial
Best for short-term loans
Who should consider it: Businesses with cash flow gaps.
Fora Financial is a good option for businesses that are struggling to qualify with traditional lenders and need to access capital fast. You also have the option to borrow more once you’ve paid 60% of your loan. You should make sure you can afford the additional debt and frequent payments before asking for a loan increase, however. For those looking to finance a long-term purchase, you should consider alternatives with longer term options, as Fora’s repayment terms max out at 18 months.
OnDeck
Best for no collateral requirements
Who should consider it: Businesses that don’t have large assets to pledge.
OnDeck doesn’t require physical collateral or appraisals, which combined with its minimum credit score requirement makes it a good option for startups that are having trouble qualifying with a traditional lender because of a lack of collateral or a low credit score. Keep in mind though, that payments are daily or weekly.
Fundbox
Best for quick funding
Who should consider it: Borrowers who need access to flexible capital fast.
You may be able to qualify for a business line of credit from Fundbox with a minimum credit score of
600
, and you can choose between 12 or 24 week repayment terms every time you make a draw. In addition, there are no prepayment, account maintenance or inactivity fees, which allows you to make decisions that are best for the growth of your business.Accion Opportunity Fund
Best for low revenue
Who should consider it: Early-stage minority- or women-owned companies that have at least $50,000 in annual revenue.
Accion is a nonprofit community development financial institution dedicated to addressing financial inequity in underserved communities. Specialists work with your business to provide personalized offers and options that work best for your unique needs. After funding, Accion provides a resource library plus free mentoring and coaching to its borrowers. Even if you can’t qualify for a loan with Accion, it will provide guidance navigating the business funding space.
» MORE: Can you get a startup business loan if your company has no revenue?
National Funding
Best for equipment financing
Who should consider it: Businesses that need to finance large equipment purchases.
National Funding finances up to $150,000 in equipment purchases, with no upfront down payment required. It will finance up to 100% of the equipment you’re purchasing, and it offers prepayment discounts, which allow you to save interest if you can repay your loan early.
AltLINE
Best for invoice factoring
Who should consider it: B2B businesses that have cash flow tied up in unpaid customer invoices.
AltLINE is an invoice factoring company that can provide capital in as little as 24 hours. There are no minimum time in business or credit score requirements, making it a solid option for borrowers with bad credit and even the newest business. Furthermore, it will factor from $10,000 to $5 million in invoices per month.
Kiva
Best for zero-interest loans
Who should consider it: Businesses that only need a small amount of funding and are willing to manage a crowdfunding campaign.
Kiva offers a unique crowdfunding platform that allows business owners to access up to $15,000 in funding. Because Kiva doesn’t have any credit score or time in business requirements, its loans can be a good option for startups with bad credit. Business owners have to be willing to create and manage a crowdfunding campaign, however, as well as gather support from their own community. This campaign-based structure is best for those with an existing following or social media presence.
According to the most common scoring models, such as FICO and VantageScore, poor or bad credit scores can fall between 300 and 629, while scores between 630 and 689 may be considered fair. Length of credit history, mix of account types (loans, credit cards, etc.), delinquencies or poor payment history are among the factors that can influence your credit score.
Credit score requirements will vary based on your lender and the type of loan you’re looking for, but bad-credit business loans are generally available to borrowers with FICO scores below 630.
🤓 Nerdy Tip
Predatory lenders often target borrowers who are having trouble qualifying for financing. Be wary of any lender that guarantees approval, advertises business loans with no credit check, requires a fee to review your application and lenders that are not transparent about rates and terms.
At best, those may be expensive products. At worst, they could signal predatory lenders that will potentially hurt your new company more than help it.
Banks and other traditional lenders often won’t lend to startups, especially those with a low credit score or thin credit history, because these businesses don’t have an established financial history to prove they can repay their debts. Online lenders are typically more flexible and generally require three months to one year in business whereas banks often ask for two years or more.
It is possible to get a startup business loan with bad credit, but options will be limited — and potentially costly. Here are some choices to consider.
Online loans
Online lenders may offer startup business loans to companies less than a year old or those whose owners have lower credit scores. Generally, these loans will have high annual percentage rates (APRs) because startup borrowers with bad credit are seen as riskier for the lender.
To qualify, your startup will typically need to be generating income already. For example, the Fundbox line of credit requires at least $8,333 in monthly revenue. You don’t usually have to provide collateral for these loans, though lenders may ask for a personal guarantee and/or take out a general lien on your business assets.
Online lenders may offer different types of business loans, such as short-term loans, business lines of credit, equipment financing and invoice factoring.
Community development financial institution loans
Community development financial institutions, or CDFIs, receive funding to help underserved communities. Startups that lack resources, opportunity or financial access may be able to get a business loan from a CDFI, even with bad credit.
Because CDFIs are typically banks and credit unions, they may offer competitive rates if you can qualify. However, approvals can take time, so your business will need to be able to wait for funding.
You can find a full list of community development institutions in your state on the CDFI Fund website.
Microloans
Similar to CDFIs, microlenders often focus on providing capital to traditionally underserved individuals who may be underbanked and have insufficient credit. If you qualify, a microloan can be a good choice for bad-credit startups with small funding gaps. Loans are usually $50,000 or less.
Some microlenders also issue loans through the SBA microloan program, which is specifically designed to help women, low-income, veteran and minority entrepreneurs, as well as startups and microbusinesses. Although rates and terms can vary based on the microlender, the program typically offers competitive interest rates and terms up to seven years.
Merchant cash advances
Merchant cash advance companies are alternative lenders that offer an upfront sum of capital that you repay with a percentage of your debit and credit card sales, otherwise known as a merchant cash advance. You may also be able to get an MCA directly from your payment processor, like PayPal or Shopify.
MCAs are generally easier to qualify for than typical business loans. Many merchant cash advance companies have low credit score requirements and prioritize your sales history when underwriting your application. As a result, MCAs may be a convenient option for startup businesses with consistent revenue, but lower credit scores.
It’s important to keep in mind, however, that these products can significantly impact your cash flow and have high costs (APRs can reach up to 350%), so you’ll likely want to consider all other options before turning to an MCA.
1. Evaluate your business’s credentials
In order to determine what type of business loan you can qualify for, you should check your personal credit score as well as pull your company’s financial documents, such as bank statements and balance sheets.
Although eligibility requirements vary by lender, you’ll typically want to have:
- Personal credit score of 500 or higher.
- At least three months in business.
- Consistent revenue.
2. Calculate how much debt you can afford
A lower credit score and shorter time in business can result in higher interest rates — making it difficult to repay a new loan. You’ll want to figure out how much debt you can afford before comparing loan options.
You should break down different possibilities — taking into account how much funding you need, potential interest rates and the repayment schedule. Many startup business loans for bad credit have a daily or weekly repayment schedule which can negatively impact your cash flow.
Before moving forward, you’ll want to make sure that taking on a loan will actually benefit your business at this time.
» Use our business loan calculator to help you estimate payments and interest costs.
3. Compare lenders
Generally, online lenders will offer the most options for startup business loans for bad credit. You may also find CDFIs or microlenders that are willing to work with your business. You’ll want to make sure that you understand the lender’s product offering and eligibility requirements before applying.
4. Prepare and strengthen your application
Lenders often consider startups and borrowers with bad credit as risky investments. Once you’re ready to start the application process, therefore, you’ll want to strengthen your business profile to help increase your chances of approval. You can:
Improving your credit — both business and personal — can expand your loan options and help you access better rates and terms. To build your personal credit, you can fix mistakes on your credit report and pay down debt. To build your business credit, you can establish trade credit with your suppliers and upload financial statements to the commercial credit bureaus. Some lenders may also offer business loans or lines of credit — backed with cash deposits — that can be used to establish positive payment histories.
If you secure your loan with collateral, an asset that can be seized if you don’t repay the borrowed funds, you may be more likely to get financing. Offering collateral, especially when it’s not required, may also help you access more competitive interest rates and repayment terms.
Having a cosigner on your business loan — someone who agrees to take over payments on the loan if you default — can make your application more favorable to a lender. Valuable cosigners usually have strong credit and personal finances.
5. Submit your application
Depending on your lender, you’ll submit your business loan application online, over the phone or in person. Lenders will typically ask you to provide:
- A business plan.
- Business and personal bank statements.
- Business and personal tax returns.
- Business financial statements, such as a profit and loss statement or a balance sheet.
- Cash flow projections.
You may also be required to sign a personal guarantee.
Because a good business plan can help you get funding, you may want to take advantage of the free services offered by the SBA and resources like your local Small Business Development Center and SCORE. These organizations can help you prepare your business plan and other documents that are required by the lender.
6. Review agreement and get funds
Some online lenders can issue financing within 24 hours, whereas other lenders may take longer to approve and fund loans. Before making a decision, you’ll want to compare any and all loan offers to make sure you’re getting the best deal for your business.
Once you receive your business loan agreement, you should review the document thoroughly.
You’ll want to ensure that you understand the terms and conditions — and address any questions or concerns you have with your lender — before signing.
Startups with bad credit may have more difficulty getting traditional business loans. If you’re looking for an alternative small-business financing option, here are some to consider.
If your startup isn’t eligible for other forms of business financing, you could consider a personal loan. These loans are credit-dependent, but options are available for borrowers with bad credit. And lenders only consider your personal financial profile, not your business history, when evaluating your application.
If your credit is at the high end of what’s considered a bad score (below 630), you may be able to qualify for a business credit card. You can apply for a business credit card as a true startup — before you’ve generated any revenue at all — though card issuers may give more weight to your personal finances in those cases.
Borrowing money from family and friends may be a low-cost funding option if you can’t get a business or personal loan. The terms of the loan can be flexible because you’ll have the ability to work them out with your family member or friend. However, a written agreement with loan details can help you avoid misunderstanding down the road. Your lenders will also want to consider any IRS guidelines that may apply.
Startup business grants provide financing that you don’t have to repay, although applications may be competitive and time-consuming. Nevertheless, business grants can be a good option if you’re a startup with consistent early revenue, but are facing credit challenges. To qualify, you’ll want to show the grant issuer that your business idea has staying power.
If you’re still preparing to launch your business idea, you might try raising funds with crowdfunding — where donors receive a product or service related to your business in exchange for their contribution.
Certain lenders may promise “guaranteed” startup or bad credit business loans, but you should tread lightly around these offers. Credible business lenders are unlikely to promote guaranteed approval and instead will evaluate your loan application (likely using both your time in business and credit score) before making a decision.
Yes. While you probably can’t get a bank or SBA loan with a credit score of 500, some online and alternative lenders are willing to work with borrowers who have lower credit scores and less than one year in business. Keep in mind, however, that these loan products typically have high interest rates.
You likely won’t need to put up physical collateral (like real estate) to qualify for a startup business loan from an online lender that works with bad-credit borrowers. But online lenders may file a blanket lien against your business or require a personal guarantee. This means your business or personal assets could still be at risk if the loan is not repaid.
Last updated on January 2, 2025
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 startup business loans for bad credit, we selected lenders with minimum time in business requirements of 12 months or less, minimum credit score requirements of 625 or less and strong NerdWallet star ratings.
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.
Wondering if you qualify?
It’s possible to get a business loan even if you have bad credit. Bad-credit business loans are available from alternative sources, like online or nonprofit lenders.
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