Bad Credit? Where to Find Business Loans

Small Business, Small Business Loans
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Bad credit, defined by FICO as a score of 300 to 629, is a common reason that banks use to reject small-business loan applications. Alternative lenders provide options for borrowers with a spotty credit history. These companies typically focus more on the strength of your business than on your personal credit score.

Consider these factors before choosing a financing option:

  • The lower your credit score, the more likely you’ll have a higher annual percentage rate, which includes your interest rate and all fees, on your loan
  • If you have unpaid customer invoices, you can get immediate cash through invoice factoring or financing
  • If you could wait and improve your personal credit, you may qualify for more options

Here are our recommendations:

 

Bad credit business loans: Compare options

Scroll right to see all the lenders.
Funding options for
bad credit
Fundbox invoice financingfundbox
BlueVine invoice financingbluevine
KabbageKabbage_Logo_150x40Fundbox line of credit fundbox
BlueVine line of creditbluevine
StreetSharesStreet Shares
Best forBusinesses with unpaid customer invoicesBusinesses with unpaid customers invoicesShort-term working capitalShort-term working capitalBusinesses with strong revenueWorking capital loans under $100,000
Loan details
Loan amount$1,000 to $100,000$20,000 to $2 million$2,000 to $150,000$1,000 to $100,000$5,000 to $100,000$2,000 to $100,000
APR16.4% to 76.5%17% to 60%24% to 99%15% to 59%16% to 62%9% to 40%
Minimum qualifications
Personal credit scoreNone
530NoneNone600600
Annual revenueNone$120,000$50,000$25,000$120,000$25,000
Time in business6 months 3 months1 year6 months6 months1 year
Apply now at Fundbox
Apply now at BlueVine
Apply now at Kabbage
Apply now at Fundbox
Apply now at BlueVine
Apply now at StreetShares


If you have less than a year in business

If your enterprise is less than a year old with little revenue, it’ll be tough to find a loan, no matter your credit.

Here are startup financing options to help you grow your company.

If you have unpaid customer invoices

Fundbox and BlueVine let you turn your unpaid customer invoices into immediate cash. They typically evaluate the strength of your customers, such as whether they pay on time, more than your personal credit.

Consider Fundbox’s invoice financing if you need less than $100,000 in financing. Borrowers pay a median fee of 7% on each invoice advance on a 12-week repayment option and 15.7% on a 24-week option.

BlueVine is a good option for businesses with larger invoices of up to $2 million. BlueVine charges a weekly fee of 0.5% to 1% of the invoice amount. The fee drops by 0.1 to 0.2 percentage point for borrowers whose clients pay their invoices on time.

fundbox
    Pros:

  • Fast funding
  • No minimum revenue or credit score required
  • Fees waived if you repay before 12 or 24 weeks
    Cons:

  • Costly with APRs ranging from 16.4% to 76.5%
  • Maximum funding is $100,000
Apply now at Fundbox
bluevine-e1431706679103
    Pros:

  • High borrowing maximum of $2 million
  • Fast funding
    Cons:

  • Costly with APRs between 17% to 60%
  • Harder to qualify than Fundbox
Apply now at BlueVine


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If your personal credit score is 500 or higher

Kabbage and Fundbox both provide fast working capital for business owners who don’t have perfect credit.

Kabbage is a good fit for businesses that need working capital of up to $150,000. It doesn’t require a minimum credit score, but most of its borrowers have a score of at least 500, according to the company. You’ll also need a minimum of $50,000 annual revenue and have to use a business checking or online payment platform.

Fundbox’s line of credit is an option if your business needs working capital of up to $100,000. Qualifying requires a minimum of $25,000 annual revenue, with no personal credit score requirements. (Note: Fundbox’s line of credit is unavailable to borrowers in New York, Connecticut or Georgia.)

Kabbage_Logo_150x40
    Pros:

  • Looser qualification requirements than other options
  • Fast funding
    Cons:

  • Costly financing with APRs between 24% and 99%
  • Little benefit to early repayment
Apply now at Kabbage
fundbox

Line of credit

    Pros:

  • Easier to qualify
  • Early repayment flexibility
    Cons:

  • Costly financing with APRs between 15% and 59%
Apply now at Fundbox


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If your personal credit score is 600 or higher

StreetShares and BlueVine offer financing of up to $100,000.

Besides offering invoice factoring, BlueVine also has a line of credit for those with just six months of business history and $120,000 in annual revenue. The lender is a good fit for short-term working capital.

StreetShares offers a term loan and line of credit at lower APRs than BlueVine. It also has a longer repayment term of up to three years compared with BlueVine’s six months.

bluevine-e1431706679103

Line of credit

    Pros:

  • You need just six months of operating history to qualify for a line of credit
  • Funding as fast as 24 hours
    Cons:

  • Costly financing with APRs ranging from 16% to 62%
  • Shorter repayment term than StreetShares, at six months
Apply now at BlueVine
StreetShares-e1459274893272
    Pros:

  • Low annual revenue requirement at $25,000
  • No prepayment penalty
    Cons:

  • Weekly repayments
  • Maximum financing amount is limited to 20% of your annual revenue
Apply now at StreetShares

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Need more options?

If none of these works for you, or if you’d like to compare loan options, NerdWallet has a list of small-business loans that are best for business owners. All of our recommendations are based on the lender’s market scope and track record and on the needs of business owners, as well as rates and other factors, so you can make the right financing decision.

Steve Nicastro is a staff writer at NerdWallet, a personal finance website. Email: Steven.N@nerdwallet.com. Twitter: @StevenNicastro.

Updated July 11, 2017.