9 Small-Business Loans for Bad Credit You Can Apply and Get Approved Today

Bad Credit Business Loans: These are your 9 Best Options

Credit scores are vital to the world of borrowing. Having the right credit score can make securing funds simply, while the wrong credit score can lead to frustration. Getting business loans for bad credit or even less than perfect credit can be an uphill battle since all too many business owners have learned.

While a bad credit score does not stop you from needing funds to grow your business, banks and other traditional lenders are constantly looking to lower risk. The last thing they want is to loan money to an individual or company that might not be able to pay it back. But the good news is even without a high score; you can still obtain one of the best bad credit business loans accessible through alternative lenders. In this post, we outline those options and how to apply for one successfully.


Microlenders are organizations that often operate not for profit, which helps low-income or underserved small business owners secure loans. These loans are micro in the aspect that they are usually available in small amounts. Generally up to $35,000.

There are numerous microlenders, and each has its own set of rules and qualifications. For instance, Accion is a microlender that serves small businesses that require assistance with startup costs. A personal credit score of 575 or more is needed, so if you meet their qualifications, this can be an option if your credit scores are lower than average.

The Association for Enterprise Opportunity assists business owners in finding microlenders by business focus and state. Do a quick search and check out the microlenders’ individual websites to determine their particular credit qualifications.


Kiva is a microlender that merits its own callout due to its unique model. It provides entrepreneurs zero-percent interest loans up to $10,000. The only catch is that business owners must crowdfund their own loans from the philanthropic who utilize Kiva’s platform. Kiva has over one million donors and boasts a ninety-four percent success rate. To be eligible, you must have a business plan and invite friends and contacts for initial financing. In simple words, to find success with kiva, your personal network has to believe in you and your business too.

Moreover, Kiva reports your payment history to Experian Business. This is good for your business’s future- if you make on-time payments, you start to build a higher business Intelliscore credit score.


BlueVine is a great option for B2B businesses who have long invoice cycles and frequently find themselves waiting to get paid for products or services they have already delivered. If this is familiar to you, or you get irregular cash flow, and you would like to free up some of your money, BlueVine advances up to eighty-five percent of your outstanding invoices up to $100,000. To qualify, you will need a 530 personal credit score, and your business should be a United States-based business to business (B2B) business.


Credibly provides two different financing options, a small business loan and merchant cash advance product. Their small business loans vary from $5k-$250k. Credibly utilizes its own algorithm to qualify business owners; therefore, they have no credit score minimum. Your loan application can be approved within forty-eight hours of your online application.

To qualify, you must be in business for a minimum of six months with $15k average monthly bank deposits, and stable monthly revenue. Their rates can be high based on the risk level they assign to your business, so make sure you calculate the APR of your loan first.

Business credit cards

A business credit card, even though not a loan, can assist you to obtain the funding you need without the long process of loan approval. The required credit score varies, so you might be able to find a business credit card that will work with your current credit situation. If you are not qualified for a business credit card, you can look into getting a secured credit card. A secured credit card is one that needs a deposit or collateral upfront. In most situations, this deposit should be made in cash. A secured business credit card or secured credit card can be a valuable instrument to help you build your credit.

Equipment financing

If your business requires to replace or add new equipment, funding for bad credit is available. These loans are generally secured through the equipment you are financing. This means your lender will be so concerned about your credit score since, if you default, they will be able to recoup their losses by seizing and selling off the collateral. You can secure up to 100-percent of the value of the equipment being financed, though some lenders need a down payment between two to twenty-percent. This is an excellent option for any small business. Even with bad credit, equipment leasing and purchasing opportunities are still available because of the built collateral.

Accounts receivable financing

Accounts receivable financing, also called invoice discounting or invoice financing is an alternative financing product that converts outstanding invoices into immediate cash for your small business. They are great options for receiving the working capital you require when waiting to be paid by your customers. If you are wondering how to get a business loan with bad credit and no collateral, this option takes care of both. By using your clients’ creditworthiness and utilizing your incoming invoices as collateral, lenders mitigate a lot of the risk of lending to your business.

The financing organization typically pays you in two installments:

  • They will give your business a cash advance of seventy-five to ninety percent of the total invoices you would like to finance. Instead of paying you, your clients will pay your lender.
  • When the invoices are fully paid off, the remaining ten-twenty percent withheld from you will be paid out. You will be accountable for fees that accumulate weekly that your customer does not pay.

Contrarily to other funding options, trying to secure invoice financing with bad credit is not as much of a hassle. That is because of being based on your credit score; lenders look at the clients’ creditworthiness who will be paying them directly. This means that, if you work with customers with excellent scores, alternative lenders can look past your own credit challenges and get you the financing you need.

Short-term loans

Just as the name suggests, short-term loans for bad credit applicants are a condensed model of conventional term loans provided by a bank. Like a regular term loan or mortgage, you will receive a lump sum of cash to finance the project you need financing for. You will pay off the principal, plus interest, following a predetermined payment schedule over a repayment term.

The length of that schedule is the difference: You will pay off short-term loans much faster than a conventional term loan, which can mature up to thirty years from signing. Typically, short-term loans reach maturity in eighteen months or less, based on the principal amount and your fundability. You can utilize these loans for almost any business purpose, making them a flexible option without a long-term commitment, bad credit aside.

Alternative lenders provide short-term loans for businesses with bad credit since they have less risk tied to them. Simply put, there is less time for something to go wrong that results in default on loan- and less money to lose even though you do. Lenders like fast Capital 360 can assist you in tracing online small business loans for bad credit. Since they are typically offered to riskier borrowers, there are some caveats with short-term loans. Instead of monthly payments, you might have to pay weekly or even every day. Also, as with all bad credit business loans, assured approval for financing should never be taken for granted. If you are denied a short-term business loan because of bad credit, there are other effective financing options available.

Working capital loans

Working capital loans are utilized to finance everyday business operations such as taxes, inventory, wages, and a range of other costs that keep your business going day-to-day. Unlike some different kinds of loans, they are not used to paying for investing or other long-term assets. Working capital loans from National Funding can offer your business up to $5000,000 to support your needs right now, faster, and with minimal paperwork.

Fast business loans with bad credit are available, and you have options. Whether you select a short-term loan, merchant cash advance, equipment financing, invoice financing, business line of credit, some lenders can help you get the capital your business needs.

Whether or not you get a bad credit business loan, consider improving your personal credit and building your business credit. Building your credit is essential for several reasons, including the fact that it will help you next time you require to cover cash flow gaps, or you are presented with a growth opportunity and will keep costs down next time you need to borrow money for your business.

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