Best Startup Business Loans for Bad Credit of 2025

Startup business loans are available if you have bad credit, but you should shop carefully to keep costs in line.
Online and nonbank lenders may offer business loans for startups with bad credit, but they can be expensive with higher interest rates and fees. You should make sure your new business can handle the potential costs of any debt before taking it on.
To qualify for financing, you may need at least three months in business and a minimum credit score of 500, although requirements vary by lender. Reputable lenders do not offer small-business loans with "guaranteed approval."

Best startup business loans for bad credit

  • Expansion Capital Group Merchant Cash Advance : Best for easy approval.
  • Giggle Finance Merchant Cash Advance : Best for small-dollar merchant cash advances.
  • Fora Financial - Online term loan: Best for short-term loans.
  • OnDeck - Online term loan : Best for no collateral requirements.
  • Fundbox - Line of credit: Best for quick funding.
  • Accion Opportunity Fund - Small Business Working Capital Loan : Best for low revenue.
  • National Funding - Equipment Financing : Best for equipment financing.
  • AltLINE - Invoice Factoring : Best for invoice factoring.
  • Kiva U.S. : Best for zero-interest loans.
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Best Startup Business Loans for Bad Credit

Loan NerdWallet rating Best For Max loan amount Min. credit score Next steps
Expansion Capital Group - Merchant cash advance

Expansion Capital Group - Merchant cash advance

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Best for easy approval

$300,000

500

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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

Giggle Finance - Merchant cash advance

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Best for small-dollar merchant cash advances

$10,000

300

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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.
Fora Financial - Online term loan

Fora Financial - Online term loan

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Best for short-term loans

$1,500,000

570

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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.
OnDeck - Online term loan

OnDeck - Online term loan

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Best for no collateral requirements

$250,000

625

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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.
Fundbox - Line of credit

Fundbox - Line of credit

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Best for quick funding

$250,000

600

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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).
Accion Opportunity Fund Small Business Working Capital Loan

Accion Opportunity Fund Small Business Working Capital Loan

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Best for low revenue

$250,000

600

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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.
National Funding - Equipment financing

National Funding - Equipment financing

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Best for equipment financing

$150,000

600

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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.
AltLINE - Invoice factoring

AltLINE - Invoice factoring

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Best for invoice factoring

$5,000,000

300

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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

Kiva U.S. - Microloan

Best for zero-interest loans

$15,000

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.
Loan NerdWallet rating Best For Max loan amount Min. credit score Next steps
Expansion Capital Group - Merchant cash advance

Expansion Capital Group - Merchant cash advance

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Best for easy approval

$300,000

500

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Giggle Finance - Merchant cash advance

Giggle Finance - Merchant cash advance

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Best for small-dollar merchant cash advances

$10,000

300

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Fora Financial - Online term loan

Fora Financial - Online term loan

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Best for short-term loans

$1,500,000

570

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OnDeck - Online term loan

OnDeck - Online term loan

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Best for no collateral requirements

$250,000

625

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Fundbox - Line of credit

Fundbox - Line of credit

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Best for quick funding

$250,000

600

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Accion Opportunity Fund Small Business Working Capital Loan

Accion Opportunity Fund Small Business Working Capital Loan

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Best for low revenue

$250,000

600

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National Funding - Equipment financing

National Funding - Equipment financing

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Best for equipment financing

$150,000

600

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AltLINE - Invoice factoring

AltLINE - Invoice factoring

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Best for invoice factoring

$5,000,000

300

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Kiva U.S. - Microloan

Kiva U.S. - Microloan

Best for zero-interest loans

$15,000

300

Best Startup Business Loans for Bad Credit

Expansion Capital Group - Merchant cash advance

Best for easy approval

Max loan amount
$300,000

Min. credit score
500

Min. annual revenue
$100,000

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Expansion Capital Group - Merchant cash advance

Best for easy approval

Max loan amount
$300,000

Min. credit score
500

Min. annual revenue
$100,000

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Giggle Finance - Merchant cash advance

Best for small-dollar merchant cash advances

Max loan amount
$10,000

Min. credit score
300

Min. annual revenue
$18,000

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Giggle Finance - Merchant cash advance

Best for small-dollar merchant cash advances

Max loan amount
$10,000

Min. credit score
300

Min. annual revenue
$18,000

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Fora Financial - Online term loan

Best for short-term loans

Max loan amount
$1,500,000

Min. credit score
570

Min. annual revenue
$240,000

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Fora Financial - Online term loan

Best for short-term loans

Max loan amount
$1,500,000

Min. credit score
570

Min. annual revenue
$240,000

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OnDeck - Online term loan

Best for no collateral requirements

Max loan amount
$250,000

Min. credit score
625

Min. annual revenue
$100,000

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OnDeck - Online term loan

Best for no collateral requirements

Max loan amount
$250,000

Min. credit score
625

Min. annual revenue
$100,000

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Fundbox - Line of credit

Best for quick funding

Max loan amount
$250,000

Min. credit score
600

Min. annual revenue
$30,000

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Fundbox - Line of credit

Best for quick funding

Max loan amount
$250,000

Min. credit score
600

Min. annual revenue
$30,000

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Accion Opportunity Fund Small Business Working Capital Loan

Best for low revenue

Max loan amount
$250,000

Min. credit score
600

Min. annual revenue
$50,000

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Accion Opportunity Fund Small Business Working Capital Loan

Best for low revenue

Max loan amount
$250,000

Min. credit score
600

Min. annual revenue
$50,000

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National Funding - Equipment financing

Best for equipment financing

Max loan amount
$150,000

Min. credit score
600

Min. annual revenue
$250,000

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National Funding - Equipment financing

Best for equipment financing

Max loan amount
$150,000

Min. credit score
600

Min. annual revenue
$250,000

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AltLINE - Invoice factoring

Best for invoice factoring

Max loan amount
$5,000,000

Min. credit score
300

Min. annual revenue
Undisclosed

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AltLINE - Invoice factoring

Best for invoice factoring

Max loan amount
$5,000,000

Min. credit score
300

Min. annual revenue
Undisclosed

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Kiva U.S. - Microloan

Kiva U.S. - Microloan

Best for zero-interest loans

Max loan amount
$15,000

Min. credit score
300

Min. annual revenue
Undisclosed

Kiva U.S. - Microloan

Kiva U.S. - Microloan

Best for zero-interest loans

Max loan amount
$15,000

Min. credit score
300

Min. annual revenue
Undisclosed

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A closer look at the best startup business loans for bad credit

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.

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.

What is a bad credit score?

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.

Options for startup business loans with bad credit

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.

How to get startup business loans with bad credit

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.

Alternatives for startups with bad credit

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.

Frequently asked questions

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