Best bad credit business loans in June 2023

Written by
TJ Porter
Edited by
Robert Thorpe
Reviewed by
Kenneth Chavis IV
May 30, 2023
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It can be challenging to secure funds for your business when you don’t have good or excellent credit. But even if your options are limited, you may be in luck. 

Bad credit business loans are often available to business owners with personal credit scores that are considered bad or fair (FICO scores of 300 to 669). These loans often come with higher interest rates and shorter repayment terms compared to traditional loans available to people with the best credit. But if you need financing now, it’s important to have options. 

We’ve named the best bad credit business loans below along with some tips to help you find the right loan for you and your business.

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Best for fast prequalification

4.6

Bankrate Score
Loan amount
$25k- $400K
Term: 3 - 15 months
Interest rate
1.11 factor rate
Fastest funding
1 business day
Apply nowArrow Right

on partner site

Best for repayment features

4.6

Bankrate Score
Loan amount
$5k- $1.4M
Term: 6 - 16 months
Interest rate
Starting at 1.10 factor rate
Fastest funding
1 business day
Apply nowArrow Right

on partner site

Best for large business loans

4.2

Bankrate Score
Loan amount
$5k- $500K
Term: 12 - 84 months
Interest rate
4.99- 35.00%
Fastest funding
1 business day
Apply nowArrow Right

on partner site

Best for low payments

4.3

Bankrate Score
Loan amount
$10k- $500K
Term: 12 - 60 months
Interest rate
Starting at 5.99% APR
Fastest funding
1 business day
Apply nowArrow Right

on partner site

Best for microloans

4.3

Bankrate Score
Loan amount
$1k–$15k
Term: 1 - 36 months
Interest rate
N/A
Fastest funding
5 business days

Best for line of credit

4.5

Bankrate Score
Loan amount
$1k- $150K
Term: 3 - 6 months
Interest rate
Starting at 4.66%
Fastest funding
1 business day

Best for working capital

4.2

Bankrate Score
Loan amount
$1k- $500K
Interest rate
Not disclosed
Fastest funding
1 business day

Best for secured credit building

4.3

Bankrate Score
Loan amount
Starting at $1k
Interest rate
Varies
Fastest funding
1 business day

Best for fast funding

4.6

Bankrate Score
Loan amount
$1k- $500K
Term: 12 - 24 months
Interest rate
Starting at 8.00%
Fastest funding
14 business days
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Compare the best bad credit business loans in June 2023

LENDER BEST FOR MIN. CREDIT SCORE LOAN AMOUNT MIN. TIME IN BUSINESS
Credibly Fast prequalification 550 $25,000 to $400,000 6 months
Taycor Financial Large business loans 600 $500 to $250,000 6 months
Triton Capital Low payments 600 $10,000 to $500,000 24 months
Bank of America Secured credit building Not stated From $1,000 6 months
Fundbox Line of credit 600 $1,000 to $150,000 6 months
PayPal Working Capital loan No credit requirements N/A $1,000 to $500,000 90 days
Fora Financial Repayment features 600 $5,000 to $1.4 million 3 months
Kiva Microloans N/A $1,000 to $15,000 N/A
Lendio Fast funding 560 $1,000 to $500,000 6 months

A closer look at our top bad credit business loans

Credibly: Best for fast prequalification

Overview: Credibly helps small and medium businesses quickly get the cash they need, minus the hassle. Thanks to a network of partner lenders, Credibly offers many types of loans, including working capital, merchant cash advances, equipment secured loans and invoice factoring. 

Why Credibly is the best for fast prequalification: Credibly is more accessible than other lenders. Most of its loans require a minimum credit score of 500 to 600 and $180,000 in annual revenue. And you're able to prequalify without any impact to your credit score, with funds arriving in your account in as little as 48 hours if approved.

Who Credibly is good for: Small business owners with poor credit and who can typically pay back their loans in a short period of time can get the most benefit out of Credibly’s fast and flexible financing.

Taycor Financial: Best for large business loans

Overview: Taycor Financial offers a range of financing, from term loans and lines of credit to equipment financing and leasing. Rates are fairly competitive with online lenders, and funding time can be within four to 24 hours. Eligibility requirements are fairly relaxed as well: Business owners with low credit scores and annual revenues of under $100,000 may be eligible for some form of financing.
 
Why Taycor Financial is the best for large business loans: Taycor Financial offers qualified borrowers lines of credit up to $250,000, term loans of up to $1 million and equipment financing of up to $2 million. Not all lenders offer a chance at such high amounts, especially when offering bad credit loans.
 
Who Taycor Financial is good for: Business owners that need sizable loans fast may be able to get approved with a quick application.

Triton Capital: Best for low payments

Overview: Triton Capital offers working capital and equipment financing, even to companies that may not have ideal credit. It can approve some loans within hours and offers loans across the U.S.
 
Why Triton Capital is the best for low payments: Triton Capital offers a “Lowest Payment Guarantee.” It promises to offer the lowest payment on an approved loan and will pay you $250 if you find a lower payment made by another non-bank finance company, which is a nice incentive to help you shop around for a good deal.
 
Who Triton Capital is good for: Triton Capital is ideal for business owners that need affordable monthly payments over the life of a loan.

Bank of America: Best for secured credit building

Overview: Bank of America is one of the largest banks in the nation and offers multiple secured and unsecured loan options. It even offers a cash secured line of credit that can automatically convert to an unsecured line of credit over time.
 
Why Bank of America is the best for secured credit building: Bank of America's cash secured line of credit requires a minimum deposit of $1,000. The application can be completed online, and accounts are reviewed starting at 12 months to see if you're eligible for an unsecured line of credit. This can also help you build credit, which is a helpful feature because not all lenders report loans and lines of credit to credit bureaus.
 
Who Bank of America is good for: Small business owners with at least $50,000 in annual revenue and six months in business are eligible to apply. This can be a good fit for anyone that doesn't need immediate financing but instead wants to build business credit and improve their chances of getting approved for more affordable loan options in the future. 

Fundbox: Best for line of credit

Overview: Fundbox is an online lender that focuses on helping businesses with working capital issues by offering lines of credit. That focus on a single type of loan lets it streamline the application process and improve the borrower experience.
 
Why Fundbox is the best for line of credit: Fundbox offers accessible lines of credit up to $150,000 to small businesses with a credit score of at least 600 and a minimum time in business of six months. The online application takes as little as 3 minutes, and funding can be as fast as next day. 
 
Who Fundbox is good for: Fair-credit borrowers who need fast financing and who can pay off their loans quickly  — within 12 or 24 weeks — may get the best value.

PayPal Working Capital: Best for no credit requirements

Overview: While traditional business loan products determine your eligibility and funding amount by your creditworthiness, income and current debt load, PayPal takes an alternative approach. You’ll be approved for a loan based on your sales volume. PayPal customers can select the terms that work best for them by setting a percentage to be automatically deducted from future sales. Instead of interest, PayPal charges a single fixed fee. 
 
Why PayPal Working Capital is the best for no credit requirements: You don’t need perfect credit or extensive business experience to access a line of credit through PayPal. 
 
Who PayPal Working Capital is good for: Business owners who have had a PayPal Business or Premier account for 90 days and who are okay with PayPal’s fast repayment terms may be the best fit.

Fora Financial: Best for repayment features

Overview: Established in 2008, Fora Financial is a direct lender. It offers traditional loans and revenue advances, which may be easier for businesses to qualify for thanks to using future revenue as collateral. It also makes getting pre-approved online easy, even if you have less-than-stellar credit.

Why Fora Financial is the best for repayment features:  Though the typical repayment period is short, Fora doesn't charge prepayment penalties and even offers a discount for prepaying your loan.

Who Fora Financial is good for: Fora is a good choice for companies that want to pay their loans off early. It also makes online qualification easy, even if you have poor credit, making it a good choice for businesses that want to get a loan online.

Kiva: Best for microloans

Overview: Kiva is a non-profit entity that offers microloans to people across the globe. Business owners in the United States can work with Kiva to get no-interest loans and access to free marketing through the Kiva site.
 
Why Kiva is the best for microloans: Kiva is best for microloans between $1,000 and $15,000 because it does not charge interest, giving business owners an inexpensive way to pay for startup costs.
 
Who Kiva is good for: Because Kiva relies on community donations and investment, it’s ideal for businesses with strong community support. It’s also good for businesses that prefer no interest to fast funding.

Lendio: Best for fast funding

Overview: Lendio is an online lending marketplace that matches small business owners with competitive funding solutions. Small business owners with bad credit can choose from an assortment of financing options, including equipment financing and business lines of credit. Lendio matches you to lenders willing to do business with you based on your financial profile and the information you submit. 
 
Why Lendio is the best for fast funding: You don’t need perfect credit or extensive business experience to access a line of credit through Lendio. Plus, the online lending platform makes it easy to explore several options you may be eligible for in minutes without hurting your credit rating. And you won’t find spending restrictions with most lenders, so you’re free to use the funds however you see fit to grow your business. 
 
Who Lendio is good for: Lendio is best for companies that need cash quickly or value the ability to choose multiple types of loans. If you want one lender for all your different financing needs, Lendio may be a good fit.

What is a bad credit business loan?

Bad credit business loans are similar to other business loans but designed for companies that have poor or limited credit. Eligibility requirements are more relaxed: Some lenders offer loans to small businesses with credit scores as low as 500. Minimum time in business and required annual revenue may also be lower.

What is a bad credit score? 

It depends on the credit scoring model the lender uses. Most small business lenders look at your personal score, rather than your business credit score. 

For personal credit, a FICO score of 300 to 579 is considered bad credit, but even borrowers with fair credit (FICO score of 580 to 669) may also have to rely on a bad credit business loan. 

Lenders may also consider business credit scores, especially if you’re pursuing an SBA loan. Depending on the scoring model, business credit scores may range from 1 to 100, with scores of 0 to 49 indicating a high-risk borrower. 

How does a bad credit business loan work?

Bad credit business loans work very similarly to any other loan. You submit an application, provide any additional documentation the lender asks, and wait for an approval. If you are satisfied with loan terms, you’ll receive a lump-sum payment or line of credit that must be repaid on a fixed schedule along with interest and fees. 

Depending on the lender, underwriting may take longer and the lender is more likely to ask for supporting documentation that shows your ability to repay the loan. If you opt for a secured loan, you’ll need to provide an asset of value as collateral, which isn’t true of unsecured loans aimed at companies with strong credit.

Requirements for a bad credit business loan

Every lender sets its own requirements when it comes to approving loans, but most will look at similar factors, including:

  • Revenue. The more your business makes, the easier it is to get a loan. Some lenders have minimum revenue requirements of $100,000 or less. 
  • Existing business debt. The more debt your company has, the harder it will be to get a new loan because your company could struggle to pay an additional bill.
  • Time in business. New companies are risky propositions for lenders. Many lenders won’t offer loans until your company has been around for at least six to 24 months.
  • Credit history. Though these loans are aimed at companies with bad credit, the lender will still look at your credit report. Some especially negative factors, like a recent bankruptcy, could block you from getting a loan.
  • Industry. If you’re in a boom-bust industry or one facing a downturn, it can be harder to get a loan.
When you apply, you’ll likely need to provide some documents to the lender. It can help to have these ready when you apply:
 
  • Business plan and loan proposal (if applicable) 
  • Business license and operating agreement 
  • Employer identification number (EIN)
  • Recent personal and business tax returns 
  • Recent bank statements 
  • Proof of business insurance
  • Payroll records 
  • Lease agreement
  • List of accounts payable and accounts receivable 
  • Business financial statements (balance sheet, profit and loss statement)

Types of bad credit business loans

There are many types of business loans aimed at companies with bad credit. Some of these loans are secured or have automatic repayment provisions, which may make them easier to qualify for than unsecured loans.

Term loans

Business term loans provide a lump-sum payment up front that must be repaid over a fixed period. Some term loans are short and have repayment terms ranging from one to three years. Medium- and long-term loans may range from three to seven years.

Lines of credit

Lines of credit are revolving lines of credit, similar to business credit cards. This type of financing gives you the flexibility to draw funds multiple times and on an as-needed basis. They may have variable interest rates, which may make repayment less predictable than other loans.

Microloans

Microloans are for small amounts, usually $50,000 or less. They’re often easier to qualify for than larger loans due to the lower risk to the lender. Many businesses use them for startup costs.

Invoice financing and invoice factoring

Invoice financing and invoice factoring allow companies to get paid immediately for the invoices they submit, for a fee. They’re often easier to qualify for if you have bad credit because lenders are more concerned with the credit score and repayment history of invoiced clients. 

Merchant cash advance

Merchant cash advances provide upfront cash to help a company meet short-term needs. The business then repays it automatically by sending a percentage of its debit and credit card sales to the lender. This is often one of the most expensive forms of business financing and can lead to a cycle of debt if the business owner is unable to pay back the debt quickly.

 

Pros and cons of bad credit business loans

As with any type of financing, bad credit business loans have benefits and drawbacks to consider.
 

Pros:

  • Flexible eligibility criteria. Lenders offering business loans to credit-challenged borrowers typically have more leniency than you’ll find with traditional banks. 
  • Access fast cash. You can get the money your company needs quickly as some lenders offer rapid funding — sometimes the same day or in just a few business days. 
  • Helps build credit. If account activity is reported to the credit bureaus, your payment history could improve, and your score will likely increase as you repay the loan. The same applies if the lender reports to the business credit bureaus.

Cons:

  • Borrowing costs. Expect higher interest rates and fees, as bad credit business loans are riskier for lenders due to the elevated chance of default. 
  • Loan limits. The amount you qualify for could be far less than what you need since the cap on business loans for bad credit borrowers may be lower. 
  • Collateral requirements. Borrowers may have to put up collateral. If you take out a secured loan, you could lose the collateral you put up if you fall behind on the loan payments.

Who should get a bad credit business loan?

Bad credit business loans are aimed at business owners who don't have good or excellent credit. Even having fair credit can make it hard to qualify for loans typically reserved for business owners with personal credit scores of 670 and above. If you need financing now and can't wait until you've built up your credit score, a bad credit business loan may be your best option. 

 
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Bankrate Insight

When you’re getting any type of loan, especially one specifically for customers with poor credit, you should be on the lookout for scams, malicious actors, and bad deals.
 
Some red flags to keep an eye out for are:
 
  • Time pressure. Be wary of any lender advertising time-limited deals that encourage you to get a loan before you have time to think about it.
  • Guaranteed approval. No good lender will approve every application it sees, so if you see this promise, be wary.
  • Upfront fees. Be careful of lenders that ask for upfront fees, such as application fees. You might pay the fee and never hear back.

Alternatives to bad credit business loans

If you aren’t sure that a bad credit business loan is right for you, consider these alternatives:
 

Where to get a bad credit business loan

If you’re in the market for a bad credit business loan, look in these places:

  • Banks. Many traditional banks offer better rates and fees, but may have strict requirements. If you have bad credit, your best chance of qualifying with a traditional bank is likely with the one you use for your business checking account.
  • Online lenders. Online lenders often specialize in fast approval and funding. Many also work with bad credit borrowers, but their interest rates and fees can be quite high.
  • Microlenders. You can often find microlenders online or through business groups in your area. They might take longer to fund your loan but can be a good way to get small amounts of cash at reasonable rates.
  • Community Development Financial Institution (CDFI). A CDFI is a lender that specifically aims to serve rural, urban, Native, and other underserved communities. There are more than 1,300 CDFIs in the US. They can be a good source of low-cost funds if you plan to start a company in an underserved area.

FAQs about bad credit business loans

Methodology

To choose the best business loans for bad credit, we ensured all loans featured offered eligibility with a credit score below 630 and are broadly available across the United States. We then considered features that make loans affordable and accessible to businesses with different characteristics and needs, including interest rates, required time in business, minimum annual revenue and fees.

 

Additionally, lenders are reviewed using a 22-point scale. We measure quality in five key areas: Accessibility, affordability, transparency, customer service and flexibility. Based on the results, lenders are given a rating between 1 and 5:

 

  • 4.5 or higher: Outstanding
  • 4 to 4.5: Excellent
  • 3.5 to 4: Good
  • 3.5 and under: Average