Business Loans

Best Business Loan Options For Bad Credit

Jan 23, 2023 • 10 min read
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      Have you ever wondered why lenders pay such close attention to your credit score? It’s because they’re protecting their assets and want to determine whether they can trust you to consistently repay the money. If your credit score reflects a solid track record, you’ll get serious consideration. If you have major blemishes in your past, many lenders take defensive action.

      Look, we realize the life of an entrepreneur is full of risk. We’ve all collected our share of bumps and bruises along the way. So there’s no shame in a less-than-stellar credit score. And if you feel like your bad credit is keeping your business from achieving its potential, you’re not alone. However, don’t let one or two rejected loan applications keep you down. It is possible to get business loans for bad credit.

      Best Business Loans For Bad Credit

      The following list highlights lenders from our selection of best business loans that offer minimum credit requirements below 650 and have a lower minimum credit score requirement than their counterparts.

      Lender/Funder*Best ForLoan/FInancing AmountMin. Time in BusinessLoan/Financing TermMin. Credit ScoreTime to Funds(After Approval)
      BlueVineLine of Credit$250K6 months6-12 months600Same day
      Ready CapitalSBA 7(a)$10k-$5 million2 years7-25 years64030-60 days SBA turnaround
      ClickLeaseEquipment FinancingUp to $20,000Any2-5 years520As soon as same day
      KapitusBusiness Cash Advance$10k-$750k1 year6-36 months5751 business day
      Raistone CapitalLarge Facility Invoice Factoring$40k-$500 million1 year30-180 daysN/AAs soon as next day
      Gillman-BagleyInvoice Factoring$50K-$10 million3 months30 daysN/AAs soon as next day
      Eagle Business FundingTransportation & Trucking Invoice FactoringUp to $5 millionNoneNone, they take on the invoice repaymentN/AAs little as 48 hours

      How a Bad Credit Score Impacts Your Business Loan Options

      Credit score requirements for business loans vary by lender and the type of loan. No credit requirements are the same, so you’ll always need to do your due diligence to find your best opportunities. This is especially true for bad credit loans online.

      Traditional banks will typically require good or excellent credit to qualify for a business loan. This means you should have a personal credit score of at least 670, although some banks will consider applicants with credit scores in the low 600s.

      If you’re applying for a long-term or SBA loan, banks may want to check your business credit score in addition to your personal credit score. In this case, you’ll want to have excellent business credit, as well—a Dun & Bradstreet score of 80 or above should suffice.

      Finding Good Loans For Bad Credit

      There’s still hope for business owners with bad credit. While big banks tend to offer the lowest interest rates, plenty of other affordable lenders out there offer bad credit loans online.

      Lending Marketplaces

      Lending marketplaces have opened the door for a new range of business owners to access business loans. These marketplaces are home to a wide range of lenders and leverage technology to connect borrowers with a loan that suits their needs and credit profile.

      Loans from these lending marketplaces have a much higher approval rate than those from traditional banks. They also tend to be much easier to apply for, and you’ll often receive funding very quickly. This makes them an ideal source of loans for people with bad credit.


      Microloans are exactly what they sound like⁠—small loans. These loans are geared toward entrepreneurs and therefore easier to qualify for than traditional loans. No credit? That’s not necessarily going to be a roadblock.

      Your microloan will typically be fulfilled by several lenders pooling their money together, so each lender can spread their risk among many different small loans. This feature makes peer-to-peer lenders more willing to lend to people with bad credit. However, if you don’t have good credit, you will end up paying higher interest rates.

      Secured Loans

      Secured business loans are loans you guarantee by offering an asset as collateral. If you fail to repay your loan, the lender can seize your asset, which could be your home, place of business, equipment, or other capital. This small business loan is riskier for you because you could end up losing your property. However, it minimizes risk for the lender, meaning they’re more willing to lend you money despite a bad credit score—and might even offer better rates than you’d get on an unsecured loan.

      Four Of The Most Popular Loans For People With Bad Credit

      It’s important to know how to get a business loan if your credit isn’t in a great place. And there is a trio of financing products that often fit the bill perfectly. These loans for bad credit options are different from typical loans both in their structure and their low barrier to entry.

      Let’s review each of the loans for bad credit and some of their unique attributes:

      1. Business Lines of Credit 

      A business line of credit is a financing option that functions a lot like a credit card. In order to qualify, you’ll need to have a credit score of 600 or higher, have a business that’s been operating for at least six months, and make $50,000 or more a year.

      2. Business Cash Advance

      A business cash advance is a strong choice for business owners with bad credit because the financing eligibility is primarily based on the company’s revenue and other financials. The approval process is typically fast, so it’s also good for companies that need immediate access to capital. Lenders usually require daily payments that are automatically debited from your business account. In addition to the principal balance, you’ll also pay a factor rate. Your daily payments are usually calculated as a fixed percentage of that day’s sales, which can help you avoid overleveraging your business.

      3. Invoice Factoring

      Lenders who offer invoice factoring focus on your business’ future earnings based on your current accounts receivables, so most lenders won’t look at your credit score. Some will have other minimum requirements, such as time in business and monthly revenue. Most lenders have limitations on the type of industry they will work with, with some specializing in ecommerce and others focused solely on B2B or B2G brands.

      4. Equipment Financing

      Equipment financing helps you finance specific purchases, whether it’s a piece of heavy machinery or software to help run your company more efficiently. In the case of equipment leasing, the purchased asset is used as collateral, which helps to widen eligibility requirements and keep interest rates lower than many other options. 

      Most lenders have a one-year minimum time in business requirement, as well as a minimum annual revenue. Personal credit score is required, but minimums start in the 500’s.

      Sustaining a Positive Credit Score

      If you’re a business owner in need of a business loan, there are always options. Bad credit won’t necessarily bar you from borrowing money, but you should keep in mind that you’ll probably have to pay a higher interest rate and your options will be limited. To give yourself the best opportunities, you should strive to improve your credit score.

      “To demonstrate that you are financially responsible, you need to develop a financial track record in good standing,” explains business finance expert Zack Friedman. “Your payment history is one of the largest components of your credit score. To ensure on-time payments, set up autopay for all your accounts so the funds are directly debited each month. FICO scores are weighted more heavily by recent payments, so you can ‘override’ a missed payment by developing a pattern of more recent on-time payments. Therefore, if you have a delinquent payment, pay off the balance.”

      Yes, consistency will always be the name of the game. So you should only borrow money when you know you’ll be able to make the payments. As you continue to demonstrate your financial reliability, call your credit card companies and ask for higher limits on your cards. This elevated access to money improves your credit utilization ratio, which in turn will enhance your credit score.

      As you approach your financial health 1 payment and 1 positive action at a time, you’ll lay the groundwork for a better future. Building credit takes time, but it’s always worth it.


      You can get financing for your business even without a strong credit score. Interest rates and other fees may be higher, and you may need to look for a financing structure beyond a standard business loan. Explore options such as a business line of credit, business cash advance, equipment financing, or invoice factoring.

      It depends on the lender, but most do check personal credit scores as part of the business loan application.

      FICO credit scores range from 300 to 850. Lenders typically consider a “bad” credit score to be a 670 or less on the FICO spectrum. 

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      *The information contained in this page is Lendio’s opinion based on Lendio’s research, methodology, evaluation, and other factors. The information provided is accurate at the time of the initial publishing of the page (January 23, 2023). While Lendio strives to maintain this information to ensure that it is up to date, this information may be different than what you see in other contexts, including when visiting the financial information, a different service provider, or a specific product’s site. All information provided in this page is presented to you without warranty. When evaluating offers, please review the financial institution’s terms and conditions, relevant policies, contractual agreements and other applicable information. Please note that the ranges provided here are not pre-qualified offers and may be greater or less than the ranges provided based on information contained in your business financing application. Lendio may receive compensation from the financial institutions evaluated on this page in the event that you receive business financing through that financial institution.

      About the author
      Grant Olsen

      Grant Olsen is a writer specializing in small business loans, leadership skills, and growth strategies. He is a contributing writer for KSL 5 TV, where his articles have generated more than 6 million page views, and has been featured on and Grant is also the author of the book "Rhino Trouble." He has a B.A. in English from Brigham Young University.

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