Best Business Loans For Bad Credit

Camino Financial09 Jan 2024
Best Business Loans For Bad Credit
While business loans for bad credit do exist, they can be pricey and come with caveats. As such, it's important to carefully consider your options and their alternatives before you make a final decision on how to fund your venture. Alternative online options allow you to get the money you need when you need it.
Table of Contents
1. Best business loans for bad credit
2. Where to get a loan for a business with bad credit
3. How to get a business loan with bad credit
4. How to choose a bad credit small business loan
5. Tips for comparing business loans for poor credit lenders
6. Pros and cons of small business loans for bad credit
7. What is a bad credit score?
8. Types of bad credit business loans
9. Alternatives to loans for businesses with bad credit
7. FAQs

Best Business Loans for Bad Credit

OnDeck - Term Loan

OnDeck term loans are a great option for any business owner who needs a single sum of money quickly, whether that’s to kickstart your business or make a specific purchase, such as equipment, product, or other items. OnDeck term loans require frequent repayments; you’ll need to pay them back either daily or weekly, depending on your specific agreement and credit score. Note that you’ll need at least a 625 credit score to apply for an OnDeck term loan. This credit score is on the higher end of most bad credit scores. You will also need to have been in business for at least one year and have a minimum annual revenue of $100,000.

Fora Financial - Term Loan

Fora Financial term loans are a good option for a medium-term loan but are not a great option for startups. They require you to have been in business for at least one year and boast $15,000 in gross monthly sales. You’ll only need a credit score of 670 to qualify. Like OnDeck term loans, you’ll need to make frequent repayments with Fora Financial, repaying a bit of your loan daily. Lenders might provide you anywhere from $5,000 to $750,000 depending on your business or personal credit score, your needs, and other details about your business.

Bluevine - Line of Credit

A Bluevine line of credit is likely the fastest option if you need quick money. Lenders can approve and fund these lines of credit in as few as 12 to 24 hours, meaning that you will instantly receive the money. Bluevine lines of credit are the best choice for businesses just finding their footing, like startups, since this term loan requires you to have been in business for 6 months. You’ll need a credit score of 625 and total annual revenue of at least $120,000 to qualify.

Fundbox - Line of Credit

A Fundbox line of credit is the best option for borrowers that need quick access to funds and flexible borrowing and repayment options. Fundbox is extremely similar to a credit card, allowing you to access funds from your line of credit whenever you need them. This is startup friendly, requiring you to have been in business for only 6 months before they are willing to extend you a loan. Fundbox offers one of the most streamlined lines of credit applications available and can both approve your application and get your funds to you within one business day. They are also low on fees, with no prepayment penalties, account maintenance fees, or inactivity fees. You won’t pay interest fees on any funds you don’t directly draw from this credit line. You’ll need at least a 600 credit score to qualify for Fundbox and a minimum annual revenue of $100,000.


Credibly's a business loan for bad credit offers flexible terms, so you can choose the repayment plan that best fits your circumstances. You'll be able to make manageable payments over time or pay back the loan in a lump sum when it's due. Additionally, Credibly’s funding is fast and efficient – you can get approved for up to $400,000 for working capital loans and credit lines up to $250.000. These loans are also convenient, with no collateral requirements and only a few documents needed to apply. You don’t need to worry about perfect credit scores or long waits for approvals –

Where to Get a Loan for a Business With Bad Credit

If you have bad credit and are looking for a small business loan, you might find that traditional lenders, such as banks, are unwilling to lend to you. Thankfully, many lenders will lend to borrowers with poor credit, but you’ll need to think outside the box to find them.

Online lenders

Online lenders vary in their qualification requirements, but most require a credit score of at least 500. If you don’t have a qualifying credit score, lenders may be able to look at other factors, such as your business’s cash flow, annual revenue, and the amount of time you’ve been in business. On the one hand, online lenders are an excellent option because they allow you to get your money quickly, often as rapidly as 24 hours after you submit your application. On the other hand, they can be pricey, with lenders frequently tacking on fees and charging high rates. Essentially, online lenders are the best option for people who need a sum of money quickly and are willing to pay high-interest rates on that loan.


If you don’t need a lot of money for your venture, you might consider getting a type of loan called a microloan. Lenders are more likely to approve microloans than traditional loans if you have poor credit since they aren’t trusting you with as much money. Microloans typically provide borrowers with as little as $500 and as much as $50,000. Unfortunately, finding organizations that offer microloans to small business owners with bad credit can be challenging. You’ll likely need to seek out a nonprofit organization, as they are more likely to offer loans to people with bad credit than for-profit companies.


Microlenders are nonprofit organizations that offer loans to small businesses with or without bad credit. These loans usually have lower interest rates than traditional bank loans, but they may also require collateral or have stricter repayment terms.

How to Choose a Bad Credit Small Business Loan

Here are some of the factors you should be keeping your eye on when choosing a lender for your small business:

Interest rates

An interest rate is a percentage of your loan that is charged on top of your loan and paid to your lender. It’s important to find a lender with a low-interest rate, as it’s easy for missed payments to become out of control quickly with higher rates.

Loan Fees

Any other fees associated with your loan but unrelated to interest are called “Loan fees.” Common examples of loan fees are overdraft fees, late fees, processing fees, and closing fees. These types of fees tend to fall back in one’s mind when thinking about loan-associated costs but can hurt you down the line when not considered.

Customer Support

While all lenders and borrowers hope that a loan will go as smoothly as possible when they make an agreement, sometimes people still run into issues with repayment. Because repayment issues sometimes occur even when you’re working with the best company possible, choosing a lender with high-quality customer support is important.

Loan Amounts

Borrowers who are looking for smaller sums of money find an easier time finding a lender than people who are looking for larger ones. Borrowers looking for $50,000 or less can apply for a microloan, which, compared to other types of loans, are relatively easy to acquire.


Some lenders have higher expectations for their borrowers than others. Consider your eligibility factors like a minimum credit score, business credit scores, revenue, how long you’ve been in business, and whether or not you have declared bankruptcy in the past.

Application Procedure

It’s not uncommon for lenders to have meticulous or slow application processes, especially when dealing with lenders who loan to those with bad credit. Read up on your lender’s application process before the process begins to avoid any stress or hidden wait times and to ensure you have all the necessary paperwork ready.


Depending on how fast you need your money, speed might be an important factor in which bad credit small business loan you choose. While some lenders offer funding turnaround times that are as quick as 24 hours, others can take months. If you need your money immediately, make sure to find a poor credit lender with quick approval and funding times.

Tips for Comparing Business Loans for Poor Credit Lenders

Consider your credit score

Even with low credit scores, you can still find a business loan that works for you. That said, not all business loans are available for all people with bad credit. For example, someone with a 500 credit score might qualify for a term loan, while another person with a 450 credit score would not qualify if they applied. Take a look at lenders’ minimum required credit scores, and apply for those that fit your needs.

Identify and compare fees

Some poor credit lenders charge more fees than others; some lenders might charge origination fees and late payment fees, while others do not. Lenders also often tack on prepayment penalties, meaning that if you pay your loan off early, you’ll need to pay extra. This ensures that the lender still makes money even if you pay your loan off all at once and not on the predetermined schedule. Not all lenders are the same, so it’s important to find lenders that have as few fees as possible.

Think about each lender’s flexibility

Some lenders may have strict repayment terms and charge fees like prepayment penalties and late fees, while others might be more flexible about the amount you pay each time and how often you pay. If you need a more flexible repayment schedule, you should look for a lender with a reputation for being flexible about repayment terms. Does a business loan affect personal credit

How to Get a Business Loan With Bad Credit

Improve your credit

You might find that you do not qualify for as many loan options as you hoped. You might also find that the bad credit business loan options you qualify for do not suit your needs; for example, they might be too expensive, have high fees, or not offer enough money for your requirements. If you’ve looked at all of the bad credit business loan options out there and you don’t see one that appeals to you, you might need to improve your credit or settle for an alternative.

Consider the options

Taking out a business loan for poor credit can be expensive, time-consuming, and exhausting if you don’t choose a lender that suits your needs. As such, you should consider all the options before deciding on how to fund your venture. You need to find a lender that offers as low fees as possible, can get your money to you when you need it, and provides a flexible and reasonable repayment schedule.

Pros and Cons of Small Business Loans for Bad Credit

Small business loans are incredibly helpful in the right hands, but they are only right for some, so it is worth considering whether a loan for businesses with bad credit is the right next step for your company.


  • Kickstart your business - Applying for a loan encourages business owners to work more responsibly and ensure reliable revenue. If you have the capital you need to get started, you’ll be able to start your new venture off on the right foot.
  • Flexibility - With many different lenders on the market, it’s relatively easy to find one that suits the needs of your business. Whether you need a small or large loan and your money in 24 hours or 24 days, a lender can likely accommodate your needs.


  • High fees - Lenders that offer loans for small businesses with bad credit will charge higher fees and interest rates than ones that do not.
  • Long funding times - While other types of business funding are quick and easy, business loans can be tedious and require a lot of waiting.
  • Down payment - You might need to make a down payment on some small business loans. This payment could be significantly higher depending on how poor your credit is. If you don’t want to make a down payment before receiving your money, you might want to look for an alternative to small business loans.
  • Harm your credit further - When applying for most loans, the lender will run a credit check. This can damage your credit further. There also exist no credit check business loans, which can affect you as well with higher interest rates.
Note that if you’re a startup owner, you might have trouble applying for a business loan, as many lenders want to see that you have been in business for several years and have a minimum annual revenue and regular cash flow. Bad credit small business loans are generally a better option for established companies.

What Is a Bad Credit Score?

There are two common types of credit scores: FICO Score and VantageScore. On both the FICO scoring model and the VantageScore model, the spectrum of scores ranges from 300 to 850. A bad FICO credit score is any score below 670. A bad VantageScore credit score falls in a similar range, being defined as any score below 661. If you have a bad credit score, you will likely find it harder to get a loan, and you'll have to pay more interest on any loans that you are able to take out.

FICO Scoring Model

  • Poor: 300-579
  • Fair: 580-669
  • Good: 670-739
  • Very Good: 740-799
  • Exceptional: 800-850

VantageScore Scoring Model

  • Very Poor: 300-499
  • Poor: 500-600
  • Fair: 601-660
  • Good: 661-780
  • Excellent: 781-850

Can you get a business loan with bad credit?

Yes, some lenders are willing to fund loans for small-business owners, even those with bad credit scores. Though some lenders are willing to loan to people with poor credit, you might need to prove in other ways that you will be able to pay it back. Lenders might look at your annual revenue, business history, and cash flow to determine whether you are eligible for a business loan.

Types of Bad Credit Business Loans

Bad credit business loans come in multiple forms, so if you’re trying to decide on a business loan, you should consider which type is best for your current needs.

Term Loans

With a term loan, you ask for and receive a large lump of money all at once. You then pay the loan back to the lender and any fees and interest on a set schedule. Lenders offer both short-term and long-term loans, meaning they are a versatile option for those needing money for their business.

Lines of Credit

While lines of credit and term loans are both viable funding options for small businesses, they do not work the same way. With most loans, the lender provides the borrower with a single sum of money all at once and then must pay it back over time. A credit line is a bit more like a credit card than a term loan. With a line of credit, the lender assigns the borrower a set credit limit. The borrower then makes regular payments. While with a loan, the borrower gets access to one large sum of money all at once, with a business line of credit, the borrower consistently has access to the line of credit but does not have to use it all at once.

Secured Loans

With a secured loan, you provide some sort of collateral - whether it’s your home, your car, a bank account, stocks, or another valuable asset you own - in return for borrowing money from a lender. If you do not pay back your loan, the lender can take your assets as payment.

Merchant Cash Advances

A few different types of merchant cash advances are available for businesses with bad credit. One is the traditional merchant cash advance, which is a lump-sum payment in exchange for a percentage of your future sales. This option is best for businesses with a steady stream of customers and predictable sales volume. Another type of advance is called an invoice factoring loan. This option allows you to sell your outstanding invoices to the lender at a discount. The lender then collects the full amount from your customers, minus their fees. This option is best for businesses that have unpredictable or inconsistent sales volumes.

Alternatives to Loans for Businesses With Bad Credit

If you’ve been denied a business loan for a bad credit score or don’t feel that a loan is the best option for your business, there are several alternatives you should consider.
  • Before taking out a loan from a bank, online lender, or nonprofit, it is always best to ask your friends and family for direct loans.
  • You might also seek out nontraditional funding sources such as GoFundMe or Kickstarter, depending on the nature of your request and what you need the money for.

Business Credit Cards

Many business credit cards have less stringent requirements than traditional bank loans, which can be an option for businesses with bad credit. You have to make sure you can pay off the balance each month to avoid additional interest and fees.

Online Lenders

Many online lenders offer loans with more flexible criteria, including those for businesses with bad credit. Some companies require collateral or have higher interest rates than traditional banks, so you should research before applying for a loan.

Merchant Cash Advances

With a cash advance, businesses can receive a lump sum of money and then pay it back with a portion of their future credit card sales. This is a good option for businesses with stable income from credit card transactions.

Invoice Financing

Businesses that offer services or merchandise on credit can use invoice financing to obtain a loan based on the number of pending invoices. This type of financing is usually easier to obtain than traditional bank loans.


Crowdfunding can be an attractive option for companies that don't need a large sum of money. Businesses can raise funds from the public over the Internet.

Get The Best Financing

When it comes to getting the best business financing, having a good credit score can make all the difference. A good credit score is important for many reasons, as it can influence your ability to obtain loans and lines of credit. It could also mean lower interest rates on any debt you owe or new loans you take out. Improve your credit score and apply for a Camino Financial small business loan. Apply for a business loan today


Can I get a business loan with a 500 credit score?

Though some business loans only accept those with credit scores above 620, it is still possible to get a business loan if you have a 500 credit score. Some lenders look at factors other than just your credit score, including how long you have been in business, your cash flow, and your revenue.

Can I get a business loan with a 400 credit score?

Many business loans only accept those who have good credit scores or above, meaning that if you have a 400 credit score, you might find it challenging to find a reliable lender. If you know where to look, business loans for people with a 400 credit score are available. The lower your credit score, the higher the fees you will likely have to pay.

How can I finance a business with bad credit?

Getting a business loan with bad credit isn’t always easy. Several options exist for financing your company. When considering you for a loan, lenders look at several different factors, like your revenue, collateral, and your current debt.

Can you get business loans with bad credit?

Yes, some lenders are willing to loan money to small business owners with bad credit. While there aren’t as many options as there are for people with higher credit scores, there are a few different options to choose from.

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