Advertiser Disclosure
Fortunly's Guide

Best Bad Credit Business Loans for 2021

By
I. Mitic

July 02,2021


Defined by FICO as a score ranging between 300 and 629, bad personal credit is one of the most common reasons why traditional funding providers deny loan applications submitted by small business owners. The reason is obvious - prospective borrowers with low personal credit scores are at higher risk of defaulting on a loan. 

However, that doesn’t mean that bad credit business loans are impossible to get. Thanks to the ever-evolving online lending market, poor credit applicants also have various options to choose from. From lines of credit to term loans, equipment financing, merchant cash advances, and invoice factoring - there are options for every entrepreneur’s financial needs. 

Still, given that excellent loan terms are very rare for low credit, you’ll have to dig deep and compare multiple offers. We’re here to help you find the best bad credit business loans.

Show More...

8 Best Small Business Loans for Poor Credit

Best for: Large loans
BlueVine
BlueVine Logo
Bottom line

Launched in 2013, BlueVine is a California-based lender that helps small businesses overcome inconsistent cash flow problems. If you have a large project to fund and need money fast, BlueVine is the perfect solution. Read Review

  • Large loan amounts
  • Quick approvals and fast funding times
  • Excellent customer support
Apply Now
On BlueVine Website
Minimum credit score:
530+
Minimum time in business:
Three months
Minimum revenue:
$10,000/month
Collateral and guarantees:
N/A
Loan type:
Invoice factoring
Borrowing amount:
$20,000-$5 million
Estimated APR:
15% to 78%
Term length:
One to 13 weeks
Best for: Equipment financing
Currency
Currency Logo
Bottom line

Currency is a fintech company that helps funding seekers find the right third-party equipment loans. Operating as a lending marketplace, Currency has a long list of lending partners, making it a good choice for applicants of all credit profiles. Read Review

  • High borrowing amounts
  • Convenient application procedure
  • Long-term funding options available
Apply Now
On Currency Website
Minimum credit score:
585
Minimum time in business:
Six months
Minimum revenue:
$75,000/year
Collateral and guarantees:
Purchased equipment / other business assets
Loan types:
Equipment financing
Borrowing amount:
$5,000-$500,000
Estimated APR:
6%-24%
Term length:
24, 36, 48, 60, or 72 months
Best for: Startups
Accion
Accion Logo
Bottom line

Accion is a non-profit community lender that offers relatively inexpensive funding options and financial education to startups, entrepreneurs, and other underserved groups of small business owners. Read Review

  • Monthly repayments
  • Suitable for startups and underserved groups
  • Relaxed borrower qualifications
Apply Now
On Accion Website
Minimum credit score:
575
Minimum time in business:
No requirements
Minimum revenue:
Sufficient cash flow for repayment
Collateral and guarantees:
Personal guarantee; business assets
Loan types:
Term loans
Borrowing amount:
$300-$1,000,000
Estimated APR:
7%-34%
Term length:
Six months to five years
Best for: Square Capital customers
Square Capital
Square Capital Logo
Bottom line

Square Capital is a mobile processing giant that also offers financing options to small businesses. Considering that this lender evaluates prospective borrowers’ applications based on their cash flow rather than credit score, bad credit applicants also stand a chance with Square Capital. Read Review

  • No credit score or time-in-business requirements
  • No prepayment penalties
  • No ongoing interest charges
Apply Now
On Square Capital Website
Minimum credit score:
No requirements
Minimum time in business:
No requirements
Minimum revenue:
$10,000 in annual sales on Square
Collateral and guarantees:
No collateral for $75,000 or less
Loan types:
Merchant cash advances
Borrowing amount:
$300-$100,000
Estimated APR:
One-time fee
Term length:
A maximum of 18 months
Best for: Beginners
Lendio
Lendio Logo
Bottom line

Lendio is a lending matchmaker that connects small business owners in need of funding solutions with more than 75 investors in its network. As one of the largest platforms of its kind, Lendio offers an extensive list of funding types, even for bad credit applicants. Read Review

  • Fast funding times
  • Relaxed borrower requirements
  • Multiple loan types available
Apply Now
On Lendio Website
Minimum credit score:
550
Minimum time in business:
Six months
Minimum revenue:
$50,000/year
Collateral and guarantees:
Depends on the funder
Loan types:
Term loans, lines of credit, invoice factoring, MCAs
Borrowing amount:
$5,000-$2 million
Estimated APR:
8%-24%
Term length:
One to five years
Best for: Short-term funding
LoanBuilder
LoanBuilder Logo
Bottom line

The LoanBuilder PayPal service offers short-term funding solutions to small and medium-sized businesses located anywhere in the US. Best known for total cost transparency, relatively inexpensive rates, and the handy LoanBuilder Configurator tool, this funding provider is a good choice if you have an imperfect credit history and need the money fast. Read Review

  • Cost transparency
  • Useful LoanBuilder Configurator tool
  • A PayPal account isn’t obligatory
Apply Now
On LoanBuilder Website
Minimum credit score:
550
Minimum time in business:
Nine months
Minimum revenue:
$42,000/year
Collateral and guarantees:
Personal guarantee, business assets
Loan types:
Term loans
Borrowing amount:
$5,000-$500,000
Estimated APR:
24.83% - 49.94%
Term length:
13 to 52 weeks
Best for: Insurance or real estate businesses
Biz2Credit
Biz2Credit Logo
Bottom line

Biz2Credit was launched in 2007 to help small business owners operating in a wide range of industries find quick and convenient access to some additional capital. Instead of providing loans directly, Biz2Credit is an online lending matchmaker that connects prospective borrowers with a large network of funding providers. Read Review

  • Large loan amounts
  • Available in all 50 states
  • Excellent customer service
Apply Now
On Biz2Credit Website
Minimum credit score:
575 (recommended)
Minimum time in business:
Six months
Minimum revenue:
Varies by lender
Collateral and guarantees:
Varies by lender
Loan types:
Working capital
Borrowing amount:
$25,000-$2 million
Estimated APR:
4%-26%
Term length:
Repaid from business receipts
Best for: Lines of credit
Kabbage
Kabbage Logo
Bottom line

Operating since 2009, Kabbage is an online lender that provides lines of credit to small business owners. Given its modest eligibility requirements and fast funding times, it’s best suited for borrowers who don’t have impeccable credit histories and need the money fast. Read Review

  • Relaxed borrower qualifications
  • Useful loan calculator
  • Fast funding
Apply Now
On Kabbage Website
Minimum credit score:
560
Minimum time in business:
One year
Minimum revenue:
$50,000 (or at least $4,200 in the last three months)
Collateral and guarantees:
Personal guarantee
Loan types:
Lines of credit
Borrowing amount:
$2,000-$250,000
Estimated APR:
24%-80%
Term length:
Six, 12, or 18 months
Evaluation Criteria

How We Determine the Top Business Loans for Bad Credit

Business owners and entrepreneurs often find themselves in a situation where they need to look for additional funding sources. For some, this is a natural step on the way to launching a business or helping it expand or grow, while for others, it's all about overcoming a sudden financial issue. Either way, as a business owner with poor personal credit you may be dreading taking this step.

Let us break the good news - unsecured business loans for bad credit aren't impossible to find. Getting a loan with excellent terms won't be easy; however, it's important to keep in mind that you won't be denied a loan just because your personal credit score isn't perfect. 

Much like with any other business-related venture, the best approach that you should take involves a lot of planning and research. We're here to assist you with that. Before we dive into comprehensive reviews of selected providers, here's an overview of the methodology we've employed. 

Credit Score Rating

While it’s much easier to get a loan with strong personal credit, we’ve written this article to prove that applicants with personal credit scores ranging from 500 to 600 shouldn’t be discouraged as they also have various financing options to choose from. Considering that most lenders on our list evaluate applications based on the prospective borrower’s overall financial health, business loans with no personal credit check are also an option.

Time in Business

Some funding providers offer their products and services only to established businesses that have been operating for at least five to 10 years, while others don’t mind providing the needed capital to startups and small businesses that otherwise wouldn’t be able to grow. If you’re just starting out, the good news is that there are lenders that won’t look away even if your business has only been active for three months.

Annual Revenue

If you’ve ever done some research on small business loans, you’ve probably noticed that many funding providers require you to demonstrate that you already make lots of money on a monthly or yearly basis before they decide to lend you some more. Fortunately for those seeking a bad credit business line of credit or any other funding type, there are several options for business owners with low and/or unsteady incomes.

Funding Types Offered

As far as funding types offered by online lenders go, the most common options include lines of credit, installment loans, equipment financing, merchant cash advances, and invoice factoring. While some lenders list a much wider range of products, others focus on offering a single loan type. However, remember that bad credit funding choices are limited with most providers.

Speed of Approval

What makes online lenders really stand out from more traditional funding sources is that they don’t keep prospective borrowers waiting for weeks or even months for approval (or denial). Not only do alternative lenders let you know whether you’ve qualified for a loan at record speeds, but some of them also fund your application in less than 24 hours.

Term Length

When applying for bad credit loans online, you should also make sure to understand how much time you’ll be given for repayment. Depending on the funding type and it’s provider, repayment periods can be as long as 10 years or as short as a couple of weeks.

Annual Percentage Rate (APR)

Commonly mistaken with interest rates associated with certain types of loans, the annual percentage rate is defined as an estimate of how much the funding will cost you in one year in total. What makes APR different from the interest rate is that it includes all the rates and fees that are charged to borrowers and paid to lenders throughout one year.

Quick Breakdown

8 Best Bad Credit Business Loans in 2021:

Business Loans for Bad Credit - Detailed Reviews

BlueVine Review

5 stars Our Rating
Minimum credit score:
530
Minimum time in business:
Three months
Minimum revenue:
$10,000/month
Collateral and guarantees:
N/A
Loan types:
Invoice factoring
Borrowing amount:
$20,000-$5 million
Estimated APR:
15% to 78%
Term length:
One to 13 weeks
Speed of approval:
Less than 24 hours
BBB rating:
A

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

As far as loans for small business owners with bad credit go, 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. 

Here’s how invoice factoring works. 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 bad credit 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 bad credit 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 business loan 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

When applying for small business loans for bad credit, you should keep in mind that the 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 bad credit 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
+ Show more
Read Full Review

Currency Review

4.5 stars Our Rating
Minimum credit score:
585
Minimum time in business:
Six months
Minimum revenue:
$75,000/year
Collateral and guarantees:
Purchased equipment and other business assets
Loan types:
Equipment financing
Borrowing amount:
$5,000-$500,000
Estimated APR:
6%-24%
Term length:
24, 36, 48, 60, or 72 months
Speed of approval:
A few minutes to one business day
BBB rating:
A+

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. Thanks to its long list of lending affiliates, Currency is able to offer loan options for prospective borrowers of all credit profiles, even business loans for people with bad credit.

Funding Types Offered

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

Here’s how to get bad credit equipment financing via Currency. 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 online loans for bad credit, 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 on a loan for bad credit, 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.

When you apply for a business loan with bad credit, you expect the lender to charge you an extremely high APR. However, that’s not the case with Currency. 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 loans. 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 for low credit score 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 small business loan with bad credit.

Highlights

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

Accion Review

4.5 stars Our Rating
Minimum credit score:
575
Minimum time in business:
No requirements
Minimum revenue:
Sufficient cash flow for repayment
Collateral and guarantees:
Personal guarantee or business assets
Loan types:
Term loans
Borrowing amount:
$300-$1,000,000
Estimated APR:
7%-34%
Term length:
Six months to five years
Speed of approval:
One to three business days
BBB rating:
N/A

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. Considered as one of the best places to get a business loan with bad credit, 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.

Given that Accion provides loans for people with bad credit, its funding options are fairly easy to get. 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 for the best bad credit business loans 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. 

In addition to finding ways to provide business loans for very bad credit, 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 bad credit loans for business owners 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 businesses 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 looking for online loans for bad credit who don’t seem to qualify elsewhere.

Highlights

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

Square Capital Review

4 stars Our Rating
Minimum credit score:
No requirements
Minimum time in business:
No requirements
Minimum revenue:
$10,000 in annual sales on Square
Collateral and guarantees:
No collateral for loans of $75,000 or less, no personal guarantees
Loan types:
Merchant cash advances
Borrowing amount:
$300-$100,000
Estimated APR:
One-time fee
Term length:
No set date, a maximum of 18 months
Speed of approval:
Less than 24 hours
BBB rating:
N/A

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 no credit check business loans. 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 - some of the best loans for bad credit. 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. 

So, how can you qualify for this provider’s business loans with bad credit? 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

If you are on the hunt for quick loans for bad credit, you should definitely consider Square. 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. Simply put - bad credit business loans are available through this provider.

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. The bottom line is that if small loans for bad credit are your only option, Square will serve you well. However, established businesses with a good credit history should explore other options.

Highlights

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

Lendio Review

4 stars Our Rating
Minimum credit score:
550
Minimum time in business:
Six months
Minimum revenue:
$50,000/year
Collateral and guarantees:
Depends on the funder
Loan types:
Term loans, lines of credit, invoice factoring, MCAs
Borrowing amount:
$5,000-$2 million
Estimated APR:
8%-24%
Term length:
1-5 years
Speed of approval:
One to three business days
BBB rating:
N/A

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 loan options for bad credit.

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 business funding with bad credit. 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 for bad credit 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 loans for bad credit online 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 offering a solid choice of bad credit business loans, 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 - especially if you’ve never dealt with online lenders before.

Highlights

  • Fast funding times
  • Relaxed borrower requirements
  • Multiple loan types available
+ Show more

LoanBuilder Review

4 stars Our Rating
Minimum credit score:
550
Minimum time in business:
Nine months
Minimum revenue:
$42,000/year
Collateral and guarantees:
Personal guarantee, business assets
Loan types:
Term loans
Borrowing amount:
$5,000-$500,000
Estimated APR:
24.83% - 49.94%
Term length:
13 to 52 weeks
Speed of approval:
Within 24 hours
BBB rating:
A+

Overview

If you are on the hunt for fast and transparent short-term business loans for bad credit, we suggest you check out the options at LoanBuilder. 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.

Here’s how to get a bad credit business loan from LoanBuilder. 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 for bad credit 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 commercial 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 for bad- or good-credit applicants, 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
+ Show more
Read Full Review

Biz2Credit Review

5 stars Our Rating
Minimum credit score:
575 (recommended)
Minimum time in business:
Six months
Minimum revenue:
Varies by lender
Collateral and guarantees:
Varies by lender
Loan types:
Working capital
Borrowing amount:
$25,000-$2 million
Estimated APR:
4%-26%
Term length:
Repaid from business receipts
Speed of approval:
Within 24 hours
BBB rating:
A+

Overview

Launched in 2007, Biz2Credit quickly established itself as one of the best online lending marketplaces for small-business owners looking for a working capital loan despite their bad credit scores. 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 in our review.

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 bad credit business 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 for bad credit 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 bad-credit business 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
+ Show more

Kabbage Review

4.5 stars Our Rating
Minimum credit score:
560
Minimum time in business:
One year
Minimum revenue:
$50,000 (or at least $4,200 in the last three months)
Collateral and guarantees:
Personal guarantee
Loan types:
Lines of credit
Borrowing amount:
$2,000-$250,000
Estimated APR:
24%-80%
Term length:
Six, 12, or 18 months
Speed of approval:
10 minutes
BBB rating:
A+

Launched more than a decade ago, Kabbage is the online destination to visit if you need a business line of credit for bad credit. Well-known for its speed and convenience, this alternative lender uses an automated system to process the personal information of prospective borrowers. Kabbage is also praised by small business owners for its relaxed borrower requirements and excellent customer support. 

Funding Types Offered

Business lines of credit are Kabbage’s main product. This type of funding is a good choice when you need additional working capital to bridge a seasonal gap in your cash flow, finance an unexpected business opportunity, or simply cover the expenses of your company’s day-to-day operations. 

Kabbage’s startup and small business loans for bad-credit applicants range between $2,000 and $250,000. Borrowers only pay interest on the amount they draw, and each withdrawal is considered a separate loan from the issuer’s point of view. 

To qualify for a business line of credit offered by Kabbage, you need to be in the business for at least a year with a minimum annual revenue of 50,000 (or at least $4,200 in the last three months). There are no specific FICO score requirements. However, a personal score of at least 560 is recommended. 

Reasons to Choose Kabbage

You might still be asking yourself, “can I get a business loan with bad personal credit?” Allow us to introduce you to Kabbage’s approach to assessing loan applications. Unlike most funding providers that focus on the prospective borrowers’ credit scores, Kabbage makes sure to take the business’s overall financial stability into account. By looking at your online banking, vendor, and social media accounts, this alternative lender analyzes your company’s revenue and cash flow giving you a chance to qualify for a loan even if your credit score is far from perfect. 

Other great things about Kabbage include the quick and easy application process, fast finding times, and an optional fee-free loan card that you can use to make fast withdrawals from your credit line.

Reasons to Explore Other Options

If you’re looking for new business loans for bad credit, you’ll need to look elsewhere as Kabbage’s lines of credit are only available to entities that have been operational for at least a year. 

Keep in mind that while this online lender’s funding solutions are fast and flexible, they can be very expensive with APRs ranging between 24% and 99%. Moreover, given that the maximum repayment period is 18 months, those looking for longer-term funding options should look for other solutions. Although there are no prepayment penalties, you won’t be able to save on interest if you repay the loan early as Kabbage will charge the largest chunk of your interest in the first third of your repayment period. 

Final Thoughts

In conclusion, Kabbage offers excellent bad credit business loans to company owners who need the money fast, have an imperfect credit score, and don’t mind the short repayment periods. Thanks to its automated application process, you won’t need to wait for days for approval. However, if you have a little more time on your hands, we suggest you explore more affordable solutions. 

Highlights 

  • Relaxed borrower qualifications
  • Useful loan calculator
  • Fast funding
+ Show more
FAQ
How to get a loan with bad credit? +

Getting a business loan with bad credit can be a little complicated, but it’s far from impossible. Keep in mind that your credit score isn’t the only indicator funding providers take into account when evaluating your loan applications. In some cases, factors such as your time in business, monthly or yearly income, and the state of your cash flow may determine your eligibility. We suggest you explore various options (lines of credit, term loans, merchant cash advances, equipment financing, microloans for bad credit, etc) and request quotes from multiple lenders until you find the offer that works for you and your business.

What loan can I qualify for with bad credit? +

Just because you have a personal credit score over 700 doesn’t mean that you should dread applying for that business loan that you desperately need. The whole process will likely be an uphill battle; however, you should not give up getting the funds to help your business grow or overcome an unexpected bump in the road. Thankfully, more and more online funding providers continue to emerge for business owners in the same situation. Keep in mind that not all alternative lenders are created equal - they each have different loan products and eligibility requirements. However, online funders have one thing in common - they offer some of the best small business loans for low score applicants.

What is the easiest business loan to get? +

Getting a loan from an online lender or a lending marketplace is generally much easier than traditional funding sources such as banks and credit unions. Of the online business lenders on our list, BlueVine and Lendio have the lowest credit score requirements, while Square Capital doesn’t even care much about your credit score as long as your company has good cash flow.

Does a business loan affect personal credit? +

The good news is that business loans typically do not appear on your personal credit reports simply because they aren’t personal debts. If they did, they could lower your personal score and increase your debt-to-income ratio. The bad news is that when applying for bad credit business loans, you might be subject to a hard credit inquiry which may lower your credit by a few points.