10 Business Loans That Are Good For Bad Credit

If you are hoping to get better loan terms, you need to score a minimum of 670 FICO credits. Any credit that falls below 670 FICO score is generally referred to as a fair or bad credit score. To qualify for a bad business loan, you need at least a 530 FICO score.

Business owners with bad credit scores generally rely on bad credit business loans to get finances for their business.

When it comes to accessing loans, even your business credit score is essential in determining your fate, especially with traditional lenders. Like your personal credit score, your business also has unique scoring methods and classifications.

A business credit score is the reflection of the business’ payment history regarding accounts associated with the business.

Nonetheless, when it comes to accessing a business loan, lenders rely mostly on personal credits to determine the loan security for start-up businesses with no credit history.

Is It Possible to Get a Small Business Loan with A Bad Credit? 

While it is possible to access a small business loan with bad or low credits, the options are often limited and more difficult with traditional lenders. When it comes to approving loans for small and start-up businesses, the process can be complicated.

Factors like the company’s cash flow and the value of the company’s collateral come to play.

The fact is, it is easier to come to a decision when the borrower has a strong cash flow and a steady source of income.

For business owners with an unsteady flow or very low income, it is often customary for lenders to pay more attention to their documented financial records and assets. Such companies may have some difficulties having their loan approved.

On the other hand, those with good credit scores can easily access loans from both traditional and alternative lenders.

A good credit score can also qualify you for the United States Small Business Administration Loan.

Read: Loan Amortization | Expert Guide

What Kind of Loans Can You Access with Bad Credits?

There are different types of small business loans that you can access with bad credits. While some are easier to access, there are others with difficult qualification processes.

Several alternative lenders are willing to offer small business loans to companies with bad credit scores.

Alternative lenders refer to the broad range of lenders, including online peer-to-peer lenders that operate independently from traditional commercial institutions.

They act as a bridge between lenders that may face rejection due to bad credits and other factors by traditional financial institutions. With the spread of the pandemic, many traditional lenders have made it more difficult to access loans by increasing the credit standards.

Generally, many alternative lenders carry out their transactions online without a physical branch-like their counterparts—traditional lenders.

Therefore, accessing loans is usually faster and less stressful. Some of the forms of loans that lenders offer to companies with bad credit scores are:

1. Business Term Loans  

Business term loans usually have a cap on the min/max amount of funds accessible by the borrower.

A business term loan is an amount of money a business borrows from a lender and pays back with a specified percentage of the fee over a fixed period.

There are two types of business term loans, secure and unsecured term loans. When applying for a secured business loan, the lender will require collateral from the company or the company’s principal.

2. Line of Credit Loans

A business line of credit has many similarities with business credit cards. They are useful for augmenting cash flow and helps in the day-to-day running of a business.

Business line of credit is also referred to as a revolving line of credits.

A business line of credit comes with a cap on the min and max accessible amounts. The business line of credit also attracts interest.

Read: 10 Effective Steps To Get A Business Loan

3. Equipment Loans

Equipment loans are useful for financing the purchase of business equipment, renewal of rent, purchase of new work computers, etc.

This loan can help small and start-up companies pay up to 100% of the equipment cost. The equipment itself becomes collateral for the money.

It is easier to access this kind of loan from alternative lenders than the traditional lenders if you have a poor credit score.

4. Invoice Financing/Factoring

For small businesses that struggle with their cash flow due to the poor customer’s payment attitude, invoice financing is a good way to access loans to keep the company running while waiting for customers to pay their balance.

In a nutshell, invoice financing means that you offer your invoice as collateral at a discounted rate to get a small business loan for your company.

The lender pays off a percentage amount customers owe you on your invoices while retaining a percentage of the sum until the total invoice amount is paid by the customers.

Invoice financing is often not the best choice for small and start-up businesses since the interest rate is high and the borrowers are required to pay a factoring fee depending on the invoice percentage. There are several risk factors associated with invoice factoring/ financing.

Therefore, if you are a small or start-up business, you need to weigh the advantages and disadvantages before applying for this kind of loan.

5. Merchant Cash Advances (MCA)

Merchant cash advances are one of the quickest ways to access funds for a business, especially for small businesses with a bad score.

A merchant cash advance is an advance amount you receive in the projection of your company’s future sales. In most cases, this kind of loan requires that you repay through a percentage of your daily debit card and credit card receipts.

In order words, repayment of this type of loan begins as soon as you receive the funds.

A merchant cash advance can have long-term financial consequences and as such, it is a poor loan choice for financing your business.

Ten Places to Access Business Loans That Are Good for Bad Credits

If you are wondering how to get a business loan, especially if you have a bad credit score, below are the best ten small business loans for start-up companies.

#1. Upstart |Best for Start-Up Companies with Limited Credit History

Credit score: 600

Est. APR: 4.37-35.99%

Loan Amount: $1,000 to $50,000

Funding time: within 1 to 2 business days

Length of loan term: 3 to 5 years

Min annual income: $12,000 (gross income)

Other fees: origination fees—starting from 0% to 8% |late fee= 5% or $15 (depending on which amount is greater) | returned check fee=$15 |one-time paper documentation= $10  

When it comes to securing fast loans without collateral for your business, Upstart has built a reputation for being at the top of borrowers’ choices.  Upstart loans APRs start from 4.37 to 35.99%, depending on the state.

The accessible amount is a minimum of $1,000 to a maximum of $50,000. the repayment term is also flexible. You can choose to repay within a period of three to five years.

While many lenders primarily focus on the credit score of the business and the principal, Upstart looks at the educational background, job history, and the principal’s area of specialization to make their decision on a loan application.

Upstart funds are disbursed within 2 business days to qualified applicants. There are also no prepayment consequences for Upstart loans.

However, it is important to know that Upstart loans attract a one-time loan origination charge. The amount can be as high as 8% of the original loan amount disbursed to a company.

Late payment also attracts some charges as well as returned checks. Applicants for Upstart loans are also required to pay a documentation charge.

To be eligible for Upstart loans, applicants must have a US residential address, with exception to those in active military service, a persona bank account details with US routing number is also essential, etc.

Since Upstart does not solely depend on credit scores to rate borrowers, companies with a bad credit score will stand a better chance of getting approval for their loans.

#2. One Main Financial |Best for Loan Security

Credit score: not stated

Est. APR: 18-35.99%

Loan Amount: $1,500 to $20,000

Funding time: within 1 to 3 days  

Length of loan term: 24 to 60 months

Min annual income: Not stated

Other fees: origination fees—starting from $25 to $400 or 1% to 10%.|Late fee= $5 to $30 or 1.5% to 15% of the monthly payment or delinquent portion. |Insufficient funds fee: $10 to $50.

One Main Financial provides both secured and unsecured loans. One Main Financial secured loans require the borrower to provide collateral, which can either be a motor vehicle or any other valuable.

Small and start-up companies can access from $1,500 to $20,000 at  APRs ranging from 18% to 35.99% at a flexible term length. You can choose either 24, 36, 48 r 60 months.

Unlike many lenders, One Main Financial offers both secure and unsecured loans, which means that borrowers who are not successful with other lenders stand a better chance with them.

One Main also offers fast loan approval. Loan approval and fund disbursement usually take one to three days.  One Main financial also has over 1,500 physical offices for those that prefer dealing with physical structures.

When you use One Main Financial services, you will pay an origination fee that varies according to your location (state you live).

In some states, the origination fee comes in form of a flat rate, ranging from $25 to $400. Other states charge a percentage of the total loan sum. In the case of percentage, the cost can be as low as 1% and as much as 10%.

Since One Main Financial offers the option of secured loans, borrowers with bad credit can avoid other more expensive types of loans like payday loans.    

#3. Avant |Best for a variety of loan repayment choices

Credit score: FICO 580, Vantage 550

Est. APR: 9.5-35.99%

Loan Amount: $2,000 to $35,000

Funding time: next day after application

Length of loan term: 24 to 60 months

Min annual income: monthly net income of $1,200 (includes earning not from a job like alimony)

Other fees: Administration fees: as much as 4.75%| Late fees: $25 (if a monthly payment is not made within 10 days after exceeding the due date) | Dishonoured payment fee: $15

Additional requirement: Monthly free cash flow of at least $500. A debt-to-income ratio of 70%, which includes mortgage and rent payment.

For small businesses looking for unsecured loans, Avant is the best choice. Small and start-up businesses looking for how to get a business loan can now access up to $35,000 from Avant, provided they meet the qualification criteria.

There are no prepayment penalties for Avant loans and they allow a loan term of 24 to 60 months. However, the earlier you pay off your loans the better you save on interest rates. Qualified candidates usually receive their funding as soon as the next day after application.

Applying for loans with Avant attracts an administration fee of up to 4.75%. There is also a late payment fee and dishonored payment fees. Therefore, you should through the requirements before applying for Avant loans.

Read: Small Business Loans In 2022 That Is Suitable For Your Business

#4. TD Bank|Best for providing loans with low rate caps

Credit score: not stated

Est. APR: 6.99-21.99%

Loan Amount: $2,000 to $50,000

Funding time: within one business day

Length of loan term: 36 to 60 months

Min annual income: Not specified

Other fees: late fees: 5% of the due payment of $10 (depending on which is less)

Additional requirements: TD Bank loans are not for business or educational expenses. To access a loan, the applicant must be 18+ years and must provide a social security number.

Borrowers can access unsecured personal loans from TD Bank’s TD Fit loans. The amount ranges from $2,000 to $50,000 and also attracts some types of fees. When you apply for TD loans, you can get your funding within one business day.

TD Bank may not have the lowest rates when it comes to loans, the cap on their loan is comparatively low (21.99 APR). Borrowers, start-ups, and small businesses with poor credit scores can utilize TD Bank’s services to get a small business loan for their company.

TD Bank charges an extra fee of 5% or $10 (whichever is less), which is reasonably low when compared to other lenders. TD Bank does not charge monthly fees or prepayment fees for loans. There are also no insufficient funds fees or late fees.  

The max APR that TD Bank’s loan attracts is about 14%, which is far less than what is obtainable from other lenders.TD Bank helps borrowers cut down on the amount they pay as interest rates over a long period.

 #5. Upgrade |Best for fast disbursement of cash

Credit score: 560

Est. APR: 5.94-35.97% (Autopay applicable)

Loan Amount: $1,000 to $50,000

Funding time: within one business day

Length of loan term: 24 to 84 months

Min annual income: Not required

Other fees: late fees: Origination fee starting from 2.9% to 8% | Late fee: $10+ | Returned Check fee: $10

Additional requirements: =/- 75% debt-to-income ratio

The faster you can access funds as a small or start-up business, the better for you. that is why Upgrade is among the best choice when you are looking for a business loan.

Upgrade provides personal loans for small and start-up businesses, which can serve the purpose of refinancing credit cards, consolidation of debts, heavy purchases, and home upgrading.

Upgrade APRs start at 5.94% to as much as 35.97%. The loan amount that you can access from Upgrade starts from $1,000 to $50,000 with a loan term of up to 84 months.

It provides fast loans, typically within one business day via the loan provider’s confirmation method. The decision over your loan application is usually within seconds, after your application.

Note that all personal loans from Upgrade attract an origination fee ranging from 2.9% to 8%. The amount is deducted from the total sum of the loan.

For small and start-up businesses that wish to consolidate debt, their loan can be sent directly to their creditors. Loan consolidation helps small and start-up businesses focus on building their credit score.

#6. Lending Point |Best for providing small business loans

Credit score: 590

Est. APR: 9.99-35.99%

Loan Amount: $2,000 to $36,500

Funding time: next business day

Length of loan term: 24 to 60 months

Min annual income: $35,000

Other fees: late fees: Origination fee of 6%

Additional requirements: – 50% debt-to-income ratio, exemption of mortgage (offer not available in West Virginia and Nevada)

For those with credit scores below 590, Lending Point is a great opportunity for them to obtain unsecured loans from $2,000 to $36,500 at 9.99% to 35.99% APR. Lending Point offers a flexible loan term that spreads between duration of 24 to 60 months.

When compared to other lenders with tighter loan requirements and a minimum of $2,000, Lending Point allows borrowers with bad credit to access as low as $2,000.

When you apply for loans at Lending Point, you know the decision of your application in less than 1 minute. Funds get disbursed typically on the next day after your application.

However, it is essential to understand that Lending Point loans come with an origination fee of 6% that is charged on the proceeds of the loan. Lending Point requires an annual minimum income of $35,000 to be eligible for the loan.


#7. Bad Credit Loans |Best for businesses and people with bad credit scores

Credit score: not stated

Est. APR: 5.99-35.99%

Loan Amount: +/-$10,000

Funding time: within one business day

Length of loan term: 3 months to 6 years

Min annual income: Not specified

Other fees: late fees: no extra fees for using the website

Additional requirements: Applicant must be 18+ years. The full requirement will vary from one lender to another.

Bad Credit Loans is a network of lenders and financial services providers. Businesses and individuals with bad loan credits can access up to $10,000 in cash loans at APR starting from 5.99% to 35.99%. loan application with bad Credit Loans is free.

Bad Credit Loans acts as a bridge between lenders that are willing to provide loan for bad creditors and borrowers.

According to the company, its application process allows almost anyone to qualify for a loan. Therefore, it is a good opportunity for those with bad loan credits to also apply for loans.

Applying for a loan through Bad Credit Loans’ official website does not attract any fees. However, it is essential to note that Bad Credit Loans is not a lender.

The company only serves as a link between financial service providers (lenders) and consumers (borrowers). Therefore, borrowers must go through each lender’s terms and conditions carefully when applying for a loan.

People with bad loan credits stand a better chance of finding a suitable lender through Bad Credit Loans.

#8. Lending Club |Best for providing a user-friendly online experience

Credit score: 600

Est. APR: 7.04-35.89%

Loan Amount: $1,000 to $40,000

Funding time: within four days

Length of loan term: 36 months to 60 months

Min annual income: Not specified

Other fees: late fees: Origination fee: 3% | Late fee: 5% or $15 (depending on which is greater)  

Additional requirements: DTI of 40 for one person and 35 for joint applicants

There is one unique feature about Lending Club, it is the opportunity they provide for borrowers with bad credit scores to pair with others to improve their score to apply for a loan.

There is scarcely any lender that offers this opportunity to borrowers. Co-borrowing can assist small businesses that naturally will not qualify for a loan to get qualified.

Lending Club provides an elaborate online experience with a user-friendly and easy-to-use interface. There are numerous resources available on the website and various types of accessible loans.

Besides the co-borrowing opportunity, Lending Club allows a 15-day grace for borrowers who can’t offset their loan on the day it is due.

Lending Club loans attract a lending fee of 3% to 6% of the original loan sum. Borrowers can apply for microloans of $1,000.

Lending Club makes it easy for small and start-up businesses to access only the amount of money they need for their business and save them from incurring huge debts.

Read: How To Become A Business Loan Broker In 2022| Expert Guide

#9. Fundbox|Best for a business line of credits

Credit score: minimum of 500

Est. APR: starting from 4.66% (of draw amount)

Loan Amount: up to $100,000

Funding time: 1 to 2 days

Length of loan term: 12 to 24 weeks

Min annual income: $50,000

Other requirements: the business must be at least three months old

Fundbox provides just one type of funding for businesses, which is a business line of credit. TheFundbox business line of credit enables small businesses to draw funds from their line of credit (to a specific approved amount).

Fundbox business line of credit is unique because it allows you to withdraw on your credit line against unpaid invoices.

Businesses can now link their Fundbox account with their accounting software to enable them to receive payments in advance, against unpaid invoices via line of credit.

Funds are disbursed within two working days to qualified candidates. Repayment for funds will be made when you draw your funds.

Note that if you are in the following business line, you are not eligible for Fundbox loans:

  • Adult services and entertainment
  • Weapons and firearms production and distribution
  • Gambling and online gaming services
  • Drugs and drug dispensing

Fundbox works in all US states including supported territories. The application process requires companies to have a good financial history and business bank account.

The application process also requires a good knowledge of supported accounting software like:

  • ability
  • FreshBooks (Classic and New)
  • invoiceASAP
  • Clio
  • Jobber
  • Xerox
  • Zoho
  • Kashoo etc

Basic information about the principal and the type of business is also required when applying for Fundbox loans.

#10. Blue Vine |Best for providing urgent loans

Credit score: 600

Est. APR: 15% to 78%

Loan Amount: $5,000 to $250,000 (line of credit)

Funding time: within one business day

Length of loan term: 6 to 12 months

Min annual income: $120,000+

For those who need fast cash to finance their businesses, Blue Vine is the ideal place to turn to for loans. Blue Vine can provide same-day loans for small businesses. Blue Vine funds usually arrive within a few minutes to a few hours after application.

Vine also provides invoice financing for small businesses to help ease financial challenges. Small businesses with unpaid invoices that are due within 1 to 13 weeks can apply for invoice financing at Blue Vine and get the advance payment of 85% to 90% of the total invoice sum.

The reaming percentage will be paid after the customers pay for the invoice (after deduction of charges).

While poor credits can hinder your access to finances, Blue Vine can also consider you even if you fall below 630 credit score. They consider your business cash flow and your customer’s solvency for those applying for invoice financing.

Read: Great Lakes Student Loan Services Reviews 2022


Different lenders are willing to work with even companies and individuals with bad credit scores.

Therefore, knowing how to get a small business loan, especially if you have bad credit scores is very important. As a start-up or small business, cash needs come up once in a while, which can hinder the normal flow of business.

Besides taking care of core business needs, there are small loans that help to take care of personal needs, while you focus on the smooth running of your business.

Many people tend to shy away from loans due to bad credit scores, but that shouldn’t be the case. Even with a bad credit score, there is still hope for you in terms of loan application once you know the right place to apply.



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