9
Best Business Loans For Bad Credit Borrowers
Featured Partner Offers
1
OnDeck
$5,000 to $250,000
Varies by loan
625
2
BusinessLoans.com
$5,000 to $3 million
Varies by product
550
Compare the Best Business Loans for Bad Credit
| COMPANY | FORBES ADVISOR RATING | LOAN AMOUNTS | APR | LEARN MORE |
|---|---|---|---|---|
 
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$5,000 to $100,000
|
Flat fee
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From participating partners via businessloans.com’s website
| |
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up to $1.5 million
|
Not disclosed
|
Via Forbes Advisor
| |
|
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$5,000 to $1 million
|
Not disclosed
|
Via Forbes Advisor
| |
|
|
$5,000 to $300,000
|
3% to 5% monthly
|
On Credibly’s Website
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Best Bad Credit Business Loans: A Closer Look
BEST BAD CREDIT LOAN FOR MICROBUSINESSES
PayPal Small Business Loan
APR range
Flat fee
Loan amounts
$5,000 to $100,000
Minimum Credit Score
580
Flat fee
$5,000 to $100,000
580
Best known for its payment processing tools, PayPal offers installment loans to business owners who have a minimum credit score of 580.
Why We Like It
PayPal Small Business Loan may provide loans to businesses with a minimum annual revenue of just $33,300, making it an option for new ventures and small-scale businesses.
Why We Don’t Like It
PayPal charges a flat fee for loans at the beginning of the term, and if you pay the loan off early, there doesn’t appear to be a refund of that fee. This means paying your loan off early won’t reduce your borrowing costs.
Who It’s Best For
PayPal is best for existing PayPal Business customers and microbusinesses or mom-and-pop shops that need quick capital.
- No late fees
- Next-day funding possible
- Flexible eligibility criteria
- Early repayment won’t result in savings
- Unclear details on financing charges
- Next-day funding only available on $5,000 to $100,000
Lender Details
Eligibility
- Minimum credit score: 580
- Time in business: Nine months
- Minimum annual revenue: $33,300
Turnaround time
Funding may be available as soon as the next day.
BEST BAD CREDIT LOANS FOR LARGE AMOUNTS
Fora Financial
Loan amounts
up to $1.5 million
APR range
Not disclosed
Minimum Credit Score
570
up to $1.5 million
Not disclosed
570
Fora Financial offers loans of up to $1.5 million. What’s more, you may be able to request additional funds for your business once up to 60% of your loan is repaid.
Why We Like It
Fora Financial may offer prepayment discounts if you pay loans off early, and the loan application only requires a soft credit inquiry.
Why We Don’t Like It
Factor rates on Fora Financial may be high, and loan terms cap up to 18 months.
Who It’s Best For
Fora Financial is best for borrowers with high revenue who are looking to borrow a substantial sum.
- Wide selection of loan types
- Low credit score and time-in-business requirements
- Funds available in as little as 24 hours after offer acceptance
- Repayment terms only go up to 18 months
- Doesn’t publish interest rates online
- Website is somewhat confusing
Lender Details
Eligibility
- Minimum credit score: 570
- Time in business: six months
- Minimum annual revenue: $20,000 in monthly revenue
Turnaround time
Funds may arrive within one business day of approval.
BEST BAD CREDIT LOAN FOR LONG REPAYMENT TERMS
Rapid Finance
Loan amounts
$5,000 to $1 million
APR range
Not disclosed
Minimum Credit Score
550
$5,000 to $1 million
Not disclosed
550
Rapid Finance offers loans with extended loan terms of up to five years, and there’s no minimum credit requirement, making it a good choice for borrowers with weak credit profiles.
Why We Like It
We like that Rapid Finance offers loans of up to $1 million, and businesses with as little as six months of business history may qualify.
Why We Don’t Like It
The minimum revenue requirement is $200,000, which is high and could be unattainable for startups and smaller businesses.
Who It’s Best For
Rapid Finance is best suited for business owners with high revenue who need a large loan and want the option to pay it off over several years.
- Terms of 6 months
- No credit score minimum
- Same-day funding
- Origination fee
- High minimum revenue requirement
Lending Details
Eligibility
- Minimum credit score: No minimum credit score
- Minimum annual revenue: $200,000
- Required time in business: 6 months
Funding Speed
Funds may be available within hours of approval.
BEST BAD CREDIT LOAN FOR WORKING CAPITAL
Credibly
Loan amounts
$5,000 to $300,000
APR range
3% to 5% monthly
Minimum Credit Score
700+
$5,000 to $300,000
3% to 5% monthly
700+
Credibly offers large loans ranging from $5,000 to $300,000 with same-day funding available.
Why We Like It
Credibly may approve businesses in as little as four hours. Credibly charges a factor rate upfront, but if you pay off the loan early, you may be eligible to receive a portion of the fee back.
Why We Don’t Like It
Credibly charges an origination fee of to process the loan, and factor rates may be high.
Who It’s Best For
Credibly is best for borrowers who need money quickly to cover day-to-day operational expenses.
- Low minimum credit score and time-in-business requirements
- Financing starts at $10,000
- Funding up to $250,000 available within one week
- $240,000 annual revenue requirement
- Only publishes general interest rates online
- Origination fee may apply
Lending Details
Eligibility
- Minimum credit score: 700+
- Minimum annual revenue: $240,000
- Required time in business: 6+ months
Funding Speed
Funding may be available as soon as the same day.
Types of Business Financing for Bad Credit
There are many types of business financing available, even if you have bad credit. Below is a summary of the financing types to compare when shopping around.
| FINANCING TYPE | HOW IT WORKS | FEES* | INTEREST RATE* | REPAYMENT TERMS |
|---|---|---|---|---|
|
Term Loans
|
Offers a lump sum you repay in installments
|
0% to 4% is a typical origination fee
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7% to 100%+ APR
|
Generally, 12 to 60 months (good credit typically needed for longer terms)
|
|
Merchant Cash Advances
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Provides a cash advance repaid by a percentage of future debit or credit card sales
|
1.1 to 1.5 factor rates are typical
|
May be up to 50% or 100%+ when fees are calculated as an APR, depending on terms
|
Often 18 months or less, depending on customer payments
|
|
Invoice Factoring
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Offers an advance of unpaid customer invoices
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1% to 5% factoring rate plus possible administrative fees
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May be up to 20% or 60%+ when fees are calculated as an APR, depending on terms
|
Depends on net terms on customer invoices
|
|
Business Lines of Credit
|
Provides a credit line with a limit you can draw from and repay
|
Initial fees plus possible annual fees
|
4% to 50%+ APR
|
Draw periods may last for a limited time, such as 12 to 24 months, but can be as long as five years
|
Where You Can Get Bad Credit Business Loans
How To Get a Business Loan With Bad Credit
Wondering how to get a business loan with a subpar credit score? Here’s a step-by-step approach to obtaining a business loan with bad credit.
1. Take Credit Building Actions
Building good credit doesn’t happen overnight. Still, taking a few steps to improve your credit, like paying down some personal debt before applying for a loan, doesn’t hurt. Any increase in your credit score can make it easier to access more affordable rates or better loan terms and fees.
2. Make Your Application Shine in Other Ways
When you have bad credit, providing a clear, polished business plan can help you explain how you’ll use loan funds and how you’ll repay what you borrow. It may help to get outside feedback on your plan by working with a mentor or counselor at a local business development center.
3. Show Off Business Strength With Your Financials
Lenders will likely ask for financial statements—such as your tax returns, balance sheet and income statements—to review the health of your business.
This is another opportunity to showcase your value and demonstrate that your business is a worthwhile investment, despite your credit history. If bookkeeping isn’t your strong suit, hire an accountant to tidy up the books and prepare financial documents.
4. Compare Requirements for Multiple Lenders
Lenders often list minimum credit, revenue and time-in-business requirements on their websites. Check these requirements to narrow down a few loans for which you meet the requirements.
5. Review Rates and Fees
Compare rates and fees for each lender on your short list. You can contact customer service if rates and fees are not available on the website. Often, a lender representative can provide you with a cost estimate or a cost range.
6. Prequalify When You Can
Lenders may allow you to prequalify or get personalized offers and fees for products without a hard credit check. Prequalify for multiple financing products to compare offers tailored to your business. Note that offers are typically conditional, pending a thorough financial review.
7. Submit Documentation To Pass Underwriting
Provide documents as required. The qualification process varies depending on the type of financing. For example, term loans and credit lines are based on your financials and revenue.
In the case of invoice factoring, lenders also look closely at the creditworthiness of your customers to judge the likelihood that they’ll pay unpaid invoices for which you get an advance. The faster you submit your paperwork, the sooner the lender can process your request.
8. Sign Loan Documents and Receive Funding
Once approved, sign your financing documents and wait for the lender to disburse your loan funds. Many lenders can have funds available within a few business days.
Business Loan Details To Compare When Shopping Around
Pros and Cons of Getting a Business Loan With Bad Credit
Consider these advantages and disadvantages before taking out a business loan.
| PROS | CONS |
|---|---|
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Lenders may provide fast application and funding processes
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Interest and fees will likely be high
|
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Loans, credit lines and other financing can be used for working capital, inventory, equipment and more
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Amounts may be small, and loan terms short
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Alternative financing options may not require a credit check
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Revenue-based financing can be risky if you experience a drop in sales
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Loans may require collateral or a personal guarantee
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Other Options When You Have Bad Credit
There are many ways to access capital for business operations or expansion. These are some other methods of raising capital.
- Personal loans. If you have no business credit, revenue or assets, taking a personal loan could be a way to jumpstart your business. Personal loans are based on your income and credit only, and may be an easier startup loan to qualify for. Some personal loans restrict use to non-business purposes, though, so make sure to choose one that allows use for business expenses.
- Grants. Grants may be available and awarded through government agencies and private companies. Grants.gov is a good starting point for a grant search.
- Business credit cards. If you don’t have good credit, you might only qualify for a small amount on a business credit card, but using the card and paying it off could improve your credit so you can qualify for future loans.
- Crowdfunding. If you start a campaign through sites like Kickstarter, peers and future customers may be willing to back your project.
Find the Best Small Business Loans
Methodology
We reviewed 25 popular lenders based on 21 data points in the categories of loan details, loan costs, eligibility and accessibility, customer experience and the application process. We chose the best lenders that offer bad-credit funding based on the weighting assigned to each category:
- Application process: 11%
- Loan details: 25%
- Loan cost: 30%
- Customer experience: 19%
- Eligibility and accessibility: 15%
Within each major category, we considered several characteristics, including available loan amounts, repayment terms and applicable fees. We also looked at minimum credit score and time in business requirements and the geographic availability of the lender. Finally, we evaluated each provider’s customer support tools, borrower perks and features that simplify the borrowing process like online applications, prequalification options and mobile apps.
Where appropriate, we awarded partial points depending on how well a lender met each criterion.
To learn more about how Forbes Advisor rates lenders, and our editorial process, check out our Loans Rating & Review Methodology.
Frequently Asked Questions (FAQs)
Can I get a business loan with a 500 credit score?
It’s possible to get a business loan with a 500 credit score, but other areas of your business—like your revenue, business history and customer base—need to be strong in order to qualify.
What is the easiest business loan to get with bad credit?
Nontraditional online lenders provide the fastest path to business loans with bad credit. Interest rates and fees may be high, so it’s essential to shop around.
Can I get a business loan for my LLC if I have bad credit?
The short answer is yes, but if you have a credit score below 600, expect fewer loan options and higher interest rates.
Can I get a $10,000 loan with a 500 credit score?
Getting a loan with a 500 credit score is possible, but other aspects of your application, such as your business revenue, factor into the amount you can obtain.