Best Bad Credit Business Loans

Overview

Operating as a one-stop-shop for financing since 2011, Lendio is a business lending platform that matches prospective borrowers to suitable funders. The company does not originate loans directly, but it connects business owners in need of financing with its network of more than 75 business funders. Lendio is one of the largest platforms of its kind and offers a long list of funding types, even when it comes to business loans.

Funding Types Offered

Lendio’s complete range of products includes more than 10 funding types. Bad credit applicants can opt for business term loans, lines of credit, invoice factoring, or merchant cash advances.

Given that the lender collaborates with investors specializing in various types of business loans, there are no specific criteria that a prospective borrower must meet to qualify for a certain funding type.

Still, there are a few eligibility requirements that you should meet to increase your chances of getting funding. These include a minimum of six months in business, an annual revenue of at least $50,000, and a credit score that equals or exceeds 550.

Additionally, your business needs to be based in the United States, you must own a business bank account, and must not be late on your mortgage or rent payments.

Bear in mind that meeting the minimum requirements still doesn’t mean that you’ll get the funding as lender-specific requirements can vary widely. Still, as Lendio claims that almost two-thirds of all applicants get approved, there’s a good chance that you’ll be among them.

Even though the platform doesn’t charge fees for its services, the cost of working capital loans can vary greatly depending on the lender you choose to work with.

Before making your final decision, make sure that you are fully aware of the interest rates, fixed fees, prepayment penalties, administration charges, closing costs, or any other fees that you may be subject to.

Reasons to Choose Lendio

Business owners find working with a funding matchmaker such as Lendio advantageous for many reasons. First, you won’t need to spend hours of their precious time searching for suitable lenders.

Second, you can rest assured that you are not missing out on a better deal as the company will present you with multiple offers.

Third, the platform is easy to use and the services are free to use.

Finally, thanks to Lendio’s good choice of financial products and long list of funding partners, there’s no doubt that you’ll be able to find a suitable business loan, even with bad credit.

Another great thing about this lender is that it provides exceptional customer support and an excellent user experience overall. The application is easy, straightforward, and doesn’t take more than 15 minutes to complete.

After submitting your application, you won’t need to wait for more than three business days for the lending aggregator to get back to you with a list of offers.

Reasons to Explore Other Options

The most obvious drawback of applying for for a loan via Lendio is that you won’t be able to qualify for all funding types on offer (startup loans, for example, require a credit score of at least 680). 

Moreover, even though Lendio processes applications much faster than traditional funding sources such as banks, it still works slower than most direct alternative lenders.

While the company claims that it only performs soft credit checks which don’t affect your scores, some of the investors in its network still require hard ones.

In addition to that, you should keep in mind that there’s a risk that you won't be paired with the funding providers that best suit your needs. 

Final Thoughts

Considering its unmatched network of investors, it’s easy to understand how Lendio has managed to establish itself as a company that offers excellent deals relatively quickly. The application process is quick and easy, the rates are good with most lenders, and the customer support is very helpful.

If you are a poor credit applicant, remember that your options will be limited, but still worth considering.

Highlights

• Fast funding times
• Relaxed borrower requirements
• Multiple loan types available

Overview

BlueVine was launched in 2013 with the idea to help small businesses and entrepreneurs overcome problems with inconsistent cash flow. The company has quickly established itself as a business funding provider that imposes relaxed eligibility requirements and grants high loan amounts in less than 24 hours. If you have a large project in mind that needs financing and more traditional funding sources are out of your reach, BlueVine might be a good alternative. 

Funding Types Offered

BlueVine offers invoice factoring options with loan amounts ranging from $20,000 to $5 million. Also referred to as accounts receivable financing or invoice financing, this type of funding is especially convenient for business owners who often have to deal with cash flow hiccups due to unpaid invoices. 

Upon getting approved for financing from BlueVine, you’ll receive funding against accounts receivable due in one to 13 weeks. Note that the funding process has two stages. The lender will advance 85% to 90% of the total invoice amount immediately. You’ll get the remaining 10% to 15% (minus the accrued fees) after the customer pays you. 

To qualify for this funding option, you’ll need a personal score of at least 530. Your business must be a business-to-business (B2B) company based in the United States. Additionally, you’ll need to have been in the business for at least three months at the moment of application with a minimum monthly revenue of $10,000. 

BlueVine doesn’t charge application fees, maintenance fees, origination fees, or lockbox fees for its invoice factoring, nor does it require a long-term contract or termination fees.

In addition to the weekly factor rate that ranges between 0.25% and 1.7%, borrowers can also face wire transfer fees and late fees. The bank wire fee is $15; however, it can be avoided if you use free ACH transfers. There’s a two-week grace period for late fees.

If you or your clients don’t pay before the time is up, you’ll be charged a 2% or 3% fee of the amount that is due and an additional daily recurring fee between 0.2% and 0.3% until the debt is finally settled.

Reasons to Choose BlueVine

BlueVine’s loans come with quite a few advantages. This lender offers excellent options to B2B companies with long invoice cycles that often have to wait to get paid for the products or services they have already provided to clients.

If you deal with irregular cash flow issues because businesses and organizations that you work with don't pay you promptly, invoice financing is a great tool that can help you free up some cash. 

When determining whether you’re eligible for its invoice factoring product, BlueVine makes sure to evaluate your business’s overall financial situation and the creditworthiness of your customers, rather than just focusing on your personal credit score. So, if you are a poor-credit applicant, you’d be happy to hear that you stand a good chance with this funding provider. 

Considering that BlueVine’s approval process for invoice factoring takes anywhere from a few minutes to one business day, this lender is also a great option if you need the cash fast. 

Finally, it’s also worth mentioning that this online lender takes great pride in offering stellar customer support and an excellent user experience overall. 

Reasons to Explore Other Options

You should keep in mind that the loan conditions won’t be ideal. Each offer will come with a few downsides, BlueVine’s invoice factoring product included. 

If you decide to apply for funding from this provider, bear in mind that its invoice financing isn’t the market’s cheapest option - the annual percentage rates can go up to 68%.

Another reason to look for funding elsewhere is that you can get penalized for deadbeat clients. In other words, BlueVine gives you an opportunity to tap into your unpaid invoices as a source of capital; however, you can end up facing additional costs if your customers don’t pay their bills on time. 

Final Thoughts 

To conclude, if you’re in need of business financing for because your company is struggling with cash flow, BlueVine invoice factoring may be just what you’ve been looking for.

Given the lender’s relaxed eligibility requirements, a quick and easy application process, fast funding, and loan amounts up to $5 million, this funding provider’s option may be a good solution. However, keep in mind that BlueVine’s services don’t come cheap.

Highlights

• Large loan amounts
• Quick approvals and fast funding times
• Excellent customer support

Overview

Launched in 2014, Currency is a Los Angeles-based fintech company that helps prospective borrowers find the right third-party equipment loans and leases. Currency’s platform is organized as a marketplace of funding providers, each one with different lending specializations and eligibility requirements.

Funding Types Offered

Currency specializes in equipment financing, a financial product encompassing loans and leases used to either purchase or rent equipment.

The application process is quick and easy, and you won’t need to wait for more than a few minutes to a business day for an offer. First of all, you’ll need to submit some basic information such as the type of your business, your desired borrowing amount, time in business, annual sales, and your company’s latest three bank statements.

To qualify for Currency’s loans, you’ll need a personal score of 585, a minimum of six months of business activity, and annual revenue of at least $75,000.

As a part of the underwriting process, Currency will perform a soft credit inquiry to evaluate your personal creditworthiness. The company will then compare your profile with a set of its own criteria and the external lenders’ requirements, which will narrow down the list of funding providers willing to offer bad credit business loans to you. From there, Currency will choose one lender offering the product with the best rates and terms and present it to you. 

Depending on your creditworthiness and the funding provider’s policies, you’ll be able to get a loan amount ranging between $5,000 and $500,000, with a repayment term of 24, 36, 48, 60, or 72 months and an estimated APR of 6% to 24%. 

Should you decide to accept the offer, note that you’ll be allowed to use the funds to purchase equipment anywhere in the United States and from a few select dealerships in Canada.

Reasons to Choose Currency

Two-thirds of all funding requests sent to Currency get approval within minutes, while the rest is processed in one business day. The lending platform works fast and even if you don’t qualify for funding, you won’t be left waiting for an answer for too long. The whole process from the application to funding typically takes up to 72 hours.

With an average APR of 8% and a median APR of 15%, this lending platform’s annual percentage rates are quite competitive.

Another great thing about Currency is that the company helps you verify that the equipment you’re purchasing is as advertised. The due diligence process typically takes about 24 hours. If everything checks out, the lender works on payment terms with the vendor and ultimately transfers the money. 

Reasons to Explore Other Options

Currency encompasses the criteria of various lending partners; however, the platform itself also has minimum requirements and offers very few options for poor-credit borrowers.

Note that you'll have to prove that you've rebuilt your credit score if you've been in business or personal bankruptcy before. 
 
Prepayment penalties and possible additional fees represent another drawback of working with this lending marketplace. Each one of Currency's partners has different prepayment policies, and while most don’t charge their clients for repaying the loan early, some have prepayment penalties.

The same thing applies to origination fees - about 5% of loans provided by Currency’s lenders come with this additional charge. In some cases, there may also be a document fee that depends on the type of the borrower’s collateral and ranges between $75 and $575.

Currency’s business loans require collateral. The company files a lien that covers the equipment that you’re financing and the rest of your business assets. Some of the platform’s partners may also require a personal guarantee. 

Final Thoughts

Currency stands from the competition by introducing a refreshing, tech-first approach to an otherwise very traditional industry. For the most part, this lending marketplace succeeds in streamlining some daunting parts of the process, but the applicants still have to provide bank statements, let the funding provider do a soft pull of their credit report, and read through many pages of fine print.

On the plus side, rates are pretty decent, and the long list of possible lenders increases your chances of getting a loan.

Highlights

• High borrowing amounts
• Convenient application procedure
• Long-term funding options available

Overview

Established in 1961, Accion is a nonprofit community lender that specializes in helping small businesses and entrepreneurs generate income, create jobs, build assets, and succeed financially through business ownership.

Accion has already provided more than 60,000 loans to small-business owners, or more than $500 million in total. 

Funding Types Offered

Accion offers term loans (also referred to as installment loans) to small businesses located in the United States, excluding Vermont. Here’s how this type of funding works.

The borrower applies for a loan and receives a lump sum from the lender. The borrower then needs to repay the principal (the amount borrowed) plus the interest in monthly installments over an agreed-upon type frame called the term.

Note that this lender’s term loans come with both state-specific and general requirements. To qualify for a loan amount between $300 and $1,000,000, regardless of your business’s location, you’ll need a personal credit score of at least 575.

There are no specific annual revenue requirements; however, you’ll need to demonstrate that you have enough cash flow to support loan repayment.

Additionally, you must not be more than 30 days late on any bills or have any mortgage rate adjustments due during the loan term. The requirements also include no bankruptcies in the past year, no foreclosures in the past two years, and no late mortgage or rent payments in the past year.

Reasons to Choose Accion

What makes Accion really stand out from the competition is the person-first approach that it employs. While most online lenders resort to automated underwriting, this funding provider gives prospective borrowers an opportunity to explain what makes their business unique and justify why they deserve a loan.

That way, a borrower’s personal credit score becomes just one of many factors the lender takes into account when evaluating applications. 

 Accion is also praised for its networking programs and the commitment to financially educate and empower borrowers. Veterans, women, and minorities usually find themselves well-served by this lender’s programs.

Reasons to Explore Other Options

Accion is a solid funding provider overall; however, there are a few things that you need to keep in mind should you decide to apply for a loan with this company. First of all, the application process is quite lengthy. Even though we like the person-first approach that Accion is so proud of, this is one of the very few lenders that will make you wait up to three days for loan approval.

Additionally, with a processing fee of $135 and a closing charge of 3% to 5% of the loan amount, the costs of Accion’s loans can add up (APR ranges from 7% to 34%). Other drawbacks include the fact that this lender is BBB-accredited and that it doesn’t offer particularly large amounts to most borrowers. 

Final Thoughts

In conclusion, Accion is a good solution for applicants with relatively low credit scores that have been turned down for funding from more traditional sources. Given that most banks and similar business funding companies require borrowers to be active for at least a year, Accion’s lack of specific in-business time requirements make it a great choice for startup business loans.

The downside is that Accion’s annual percentage rate can potentially be high. Still, the tradeoff may be worth it for borrowers who don’t seem to qualify elsewhere.

Highlights

• Monthly repayments
• Suitable for startups and underserved groups
• Relaxed borrower qualifications

Overview

A mobile processing behemoth and an innovator in all things credit-card and small-business related, Square Capital also started offering business financing in May 2014. Nowadays, the lender provides business loans as well.

Its funding partner, Celtic Bank, has already issued $5.5 billion in loans to more than 275,000 merchants.

Square Capital's customers appreciate that there are no lengthy applications to fill out or hidden fees to watch out for. Borrowers get access to funds as soon as the next business day and can immediately use them to purchase equipment, increase inventory, or hire new employees. 

Funding Types Offered

As far as financing options go, Square Capital only offers merchant cash advances. With this type of funding, a borrower gets a lump sum of cash upfront which then repays by giving the lender an agreed-upon percentage of the business’s daily credit card and debit card sales.

The total repayment amount includes the principal plus a fixed fee ranging between 10% and 16% of the loan amount. There are no additional costs such as application fees, prepayment charges, and late fees.

Considering that the lender makes automatic deductions, you won’t need to worry about missing a deadline. Also, thanks to the percentage-based repayment system, you’ll have lower payments when your sales are slow.

However, keep in mind that the loan must be repaid in full within 18 months and that you’ll be required to pay at least 1/18 of the total loan amount every 60 days for the sake of consistent repayment progress.

Note that, should your daily credit card sales fail to cover the minimum payment, Square Capital may debit the rest of the minimum payment amount due from your linked bank account. 

The good news is that rather than relying on credit score, Square Capital mainly focuses on the prospective borrowers’ sales history. With MCA amounts starting from $300 and going up to $100,000, this lender can be a great solution for struggling small businesses that want to expand or need to deal with an emergency expense.

The bad news is that this funding option is invitation-only. In other words, you can’t apply for a loan from Square unless you already use Square’s point-of-sales system and see an offer extended to you via your Square dashboard.

You’ll be more likely to qualify if you use the company’s POS system for at least one sale a week, if you have a minimum of $10,000 in annual sales on Square and your client base is a mix of new and returning customers. 

Reasons to Choose Square Capital

As soon as the application process is completed and you’re approved for a loan, the company takes less than a business day to deposit the funds into your bank account. 

Unlike most other lenders that look at credit scores, bank statements, and tax returns when evaluating applications, Square has a different approach.

While the lender does not reveal exactly how it determines a prospective borrower’s eligibility, it definitely focuses on certain indicators from your history with Square, such as your processing volume, the growth of your business, your ratio of new and returning clients, how recently you’ve used Square, the number of chargebacks that you’ve got, and your overall activity level.

Reasons to Explore Other Options

The most obvious drawback of Square Capital’s funding options is that they are only available to merchants who have a history with the company’s other services. Some prospective borrowers have also described the lender’s MCAs as undependable, considering that you can’t apply for a loan until the platform extends you an offer.

Other drawbacks include daily payments, no benefits for early repayment, and the fact that loan amounts over $75,000 require collateral. 

Final Thoughts

Providing that you can qualify for its services, Square Capital offers convenient and relatively inexpensive funding solutions. Considering that the whole procedure is completely streamlined, you won't have to go through a daunting application process or remember to make a payment each time a deadline comes.

Highlights

• No credit score or time-in-business requirements
• No prepayment penalties
• No ongoing interest charges

Overview

Formerly owned and operated by Swift Capital, this online lender became a part of the PayPal brand in 2017. Unlike PayPal Working Capital, another funding service offered by the online payments company, LoanBuilder provides financing solutions to both PayPal sellers and business owners who have nothing to do with the popular payments platform. 

Funding Types Offered

Also marketed as PayPal Business Loans, this alternative lender offers a single type of business financing - short-term loans. If you’re looking to borrow between $5,000 and $500,000, need the money fast, and plan on repaying it in less than a year, this is the perfect option.

First up, to check your eligibility, you’ll need to complete a short online questionnaire which shouldn’t take you more than 20 minutes. Should you pre-qualify, you’ll be given a chance to review the lender’s estimated rates and adjust the borrowing amount and loan term until you’re happy with the offer. 

LoanBuilder’s borrower requirements are more relaxed than those you’d need to meet when requesting a business loan from a bank. Still, there are a few general conditions to keep in mind.

To qualify for a business loan with this provider, you must have a score of 550 or higher and run a US-business that has been active for at least nine months with a minimum annual revenue of $42,000. 

LoanBuilder charges fixed interest rates that range between 6.49% and 19.4% (24.83% – 49.94% APR). As far as additional charges go, there are no origination fees or closing costs, just a $20 returned payment fee. There is a weekly repayment schedule, and the term length starts at 13 weeks and goes up to 52 weeks. 

Reasons to Choose LoanBuilder

Not only does LoanBuilder provide some of the most affordable bad-credit loans, but it also shares all of the pricing details upfront. Given that much of the short-term lending market is opaque, especially when it comes to poor-credit funding options, the opportunity to get a rate estimate through the LoanBuilder Configurator tool without applying for a loan and risking a negative impact on your credit score is a huge advantage.

It’s also important to mention that once you get approved for a loan, LoanBuilder transfers the funds directly to your account within 24 hours. 

Reasons to Explore Other Options

Short-term funding solutions offered by LoanBuilder may be among the easiest business loans to get. However, that comes at a price.

Borrowers in need of a larger capital infusion may struggle with the 12-month term limitation. Additionally, while there are no prepayment penalties, paying off the loan early doesn’t come with economic benefits.

According to LoanBuilder’s repayment structure, the full interest amount is charged upfront.

Final Thoughts 

Not only are this online lender’s options available to business owners based in all 50 states, but its list of eligible industries is quite long. While it may not offer long-term business loans, LoanBuilder’s short-term solutions are flexible and relatively affordable. If you need the money fast and don’t mind weekly repayments, this is your best bet. 

Highlights

• Cost transparency
• Useful LoanBuilder Configurator tool
• A PayPal account isn’t obligatory

Overview

Launched in 2007, Biz2Credit quickly established itself as one of the leading online lending marketplaces. Designed to connect prospective borrowers with the most suitable lenders from a vast network of financial institutions, Biz2Credit already funded more than 225,000 applicants and procured approximately $2 billion in small business loans. 

Funding Types Offered

Biz2Credit’s full range of business funding types includes term loans, working capital, and CRE loans. Considering that bad-credit applicants can only qualify for the working capital solution, we’ll focus on this loan type here.

A working capital loan is considered a good choice for business owners who need a quick injection of cash to cover one-time expenses, pay down operational costs, hire new employees, buy equipment, purchase inventory, or expand workspaces. Note that these loans can’t be used to make long-term investments.

To qualify for a working capital loan between $25,000 and $2 million, you’ll need to be in business for at least six months and have a minimum annual revenue of $250,000 and a personal credit score of 575 or higher.

When it comes to repayment, Biz2Credit’s working capital loans work similarly to merchant cash advances. The loans are paid off automatically from your business receipts, and you can opt for a daily, weekly, or bi-monthly repayment schedule. 

As far as costs go, a Biz2Credit working capital loan comes with an annual percentage rate that ranges between 4% and 36%.

Reasons to Choose Biz2Credit

Applying for a loan through this online lending marketplace is fast and convenient. Opening an account and submitting your funding application shouldn’t take you more than five minutes. After that, one of the platform’s funding specialists will get in touch with you to help you find the financing option that best suits your needs.

All of Biz2Credit’s partners that offer working capital make quick funding decisions, so you won’t need to wait for more than 24 hours for approval. 

Another great thing about this provider’s loans is their availability to a wide range of industries. Restaurants, hotels, gas stations, liquor stores, insurance agencies, pharmacies, and real estate agencies can all benefit from funding solutions offered through this lending marketplace. 

Reasons to Explore Other Options

Although Biz2Credit offers fast and flexible financing options to small business owners, its solutions come with a few downsides. While its eligibility requirements aren’t as strict as those imposed by traditional lending institutions, many alternative lenders have even looser borrower qualifications.

It’s also important to mention that the platform’s underwriting fees range between $250 and $400.

Final Thoughts

Designed to help small business owners find fast, flexible, and affordable funding options, Biz2Credit has become one of the most popular places to get a business loan with bad credit.

This online lending matchmaker offers multiple financing types (although not all of them are available to poor-credit applicants). It also makes sure to fund solutions for business owners that operate in industries, which typically make it difficult to qualify for additional funding sources. 

Highlights

• Large loan amounts
• Available in all 50 states
• Excellent customer service