9 Best Business Loans for Bad Credit

The best bad credit business loans have a credit score requirement no greater than 600, along with other flexible qualification criteria. They should also offer a combination of excellent customer service, fast funding speeds, and low documentation requirements to apply.

Since the best type of loan will depend on your specific business needs and qualifications, we’ve selected lenders with a wide range of loan types and eligibility criteria. Some examples include term loans, credit lines, merchant cash advances (MCAs), equipment financing, and more. While you may not qualify for the best rates without a higher credit score, these lenders should still offer competitive rates compared with most other banks.

Here are our picks for the nine best business loans for bad credit:

• Lendio: Best overall for multiple lender and loan options
• Clarify Capital: Best for short-term financing
• SBG Funding: Best for custom payment terms and fast funding
• Smarter Finance USA: Best for vehicle and equipment financing
• 1West: Best for fast, automated loan options
• QuickBridge: Best for easy paperwork requirements
• National Funding: Best for customer service
• Credibly: Best provider for merchant cash advances
• FundThrough: Best for invoice factoring

Best Bad Credit Business Loans at a Glance

Lendio: Best Overall for Multiple Lender and Loan Options

Why We Like Lendio

Lendio is a broker that has a large network of over 75 partnering lenders. We chose it as our best overall pick for multiple lender and loan options since it allows borrowers access to a wide range of loan programs with just a single application. Each lender has its own eligibility criteria, which can be suitable for borrowers with less than ideal credit since some lenders may be more flexible than others. This also improves the odds of getting matched with one that is willing to issue financing.

With that said, one of the major downsides is that the specific loan qualification requirements and loan terms may not be known until you apply. To mitigate this, however, Lendio assigns a dedicated funding manager to work with each loan applicant. The advisor’s role is to walk you through the loan process, ensure you’re getting the right loan for your needs and circumstances, and match you with lenders best-suited for your company.

Lendio has a high emphasis on customer service, as evidenced by the fact that it currently has over 21,000 reviews on Trustpilot^[1] with a 4.8-star rating out of 5. You can visit the Lendio website to learn more or apply. Applications can be completed in minutes; after which you’ll be contacted by a funding manager for next steps.

Clarify Capital: Best for Short-term Financing

Why We Like Clarify Capital

Clarify Capital is another broker in this guide, similar to Lendio, that also has a large network of over 75 lenders. It offers short-term financing for a variety of business loan types, including short-term business loans, business lines of credit, equipment financing, invoice factoring, and merchant cash advances (MCA). While other providers, such as QuickBridge, also have short repayment term options, Clarify Capital has a more competitive combination of rates and qualification requirements. For those reasons, we recommend it as a better option for businesses willing and able to pay off debt quickly.

If you choose to work with this company, you’ll be paired with a funding specialist who will match you to the best loan option. Clarify Capital offers many different loan programs to suit your needs, each with varying loan terms and eligibility criteria that may be more strict than the minimums listed above.

As with most brokers, you may not know the terms and exact qualification requirements until after you apply and have your qualifications reviewed by your funding specialist. The application process is quick and can be completed in under two minutes, and the company says that decisions can be issued as fast as 24 hours. Visit the Clarify Capital website to learn more and to apply.

SBG Funding: Best for Custom Payment Terms and Fast Funding

Why We Like SBG Funding

SBG Funding, also one of our recommended top working capital loans, is an excellent option to consider for custom payment options and fast-funding speeds. It’s one of our top picks because it can issue customized payment plans to suit your company’s cash flow needs, including the possibility of providing deferred payments for up to three months.

SBG Funding works with businesses in a wide range of industries. This includes those in healthcare, construction, automotive services, retail, transportation, restaurants, and more. Borrowers should note that although SBG Funding boasts a high approval rate of 85%, meeting the minimum requirements for its loan programs does not guarantee an approval. It’s also worth noting that SBG Funding has the highest annual revenue requirement compared with the rest of the providers in this guide.

You can explore financing options with a quick online application and receive a decision in as little as 24 hours. Depending on your loan type, you may also qualify for early payoff discounts. Getting a loan and making timely payments with SBG Funding can also improve your business credit so that you can qualify for even better rates and terms in the future. Also, applying with SBG Funding will not negatively impact your credit score. Visit the SBG Funding website to learn more or to apply.

Smarter Finance USA: Best for Vehicle and Equipment Financing

Why We Like Smarter Finance USA

Smarter Finance USA is another broker we recommend with over 37 lenders in its network and has no minimum requirements for credit score, time in business, or revenue. While it may not have as many partnerships as Lendio or Clarify Capital, it specializes in financing a variety of vehicles for business purposes—including excavators, cranes, bulldozers, and trucks. Because of its expertise, it makes our list as the best pick for vehicle and equipment financing.

While it has flexible qualification requirements, it is recommended that you have a credit score of at least 600. However, that shouldn’t discourage you from applying, as Smarter Finance reviews each application on a case-by-case basis in an attempt to issue as many approvals as possible. Applicants can improve approval odds by making a large down payment or by demonstrating strong business finances.

Smarter Finance also has flexible repayment terms, including options for making payments on a weekly, monthly, seasonal, and deferred basis. To apply, visit the Smarter Finance website. Applications can generally be completed within minutes and offer quick access to funding if approved.

1West: Best for Fast, Automated Loan Options

Why We Like 1West

1West makes our list as a broker that can offer fast, automated loan options for borrowers looking to skip the process of consulting a lender. While other brokers like Lendio offer funding specialists to guide you through the application process, 1West differs in that it uses an automated engine, called ABLE (Automated Business Lending Engine) that can provide you with loan options 24/7.

Notably, 1West has partnerships with over 50 lenders, which allows for multiple opportunities to get the financing you need. This also allows for flexible qualification requirements across leaders, which can benefit businesses with limited resources or credit history.

Documents can easily be uploaded online if you decide to proceed with the loan process. Required documents typically include three months of business bank statements, a voided check for your business bank account, and a form of government-issued identification. Once completed, you’ll have the ability to check your loan status via an online dashboard.

Depending on the loan program you choose and your business qualifications, it’s possible to get approved and funded in as little as a few hours. You can visit the 1West website to learn more about each of its loan programs or to start the application process.

QuickBridge: Best for Easy Paperwork Requirements

Why We Like QuickBridge

QuickBridge is our pick if you’re looking for an easy application and approval process. Business owners should, however, make sure that financing options will not put a strain on the cash flow of their company. This is because QuickBridge has short repayment terms requiring daily or weekly repayments, one of the only providers in this guide with such constraints. However, it does offer flexible qualification requirements for businesses with strong revenue.

One of QuickBridge’s core requirements is to review your company’s most recent four months of business bank statements. Depending on your circumstances, you may also need to provide other documentation, which may include items such as tax returns, bank statements, profit and loss statements, balance sheets, loan statements, lease agreements, and more. Compared with most other lenders in this guide, however, you won’t generally need to provide as much documentation to get approved.

To apply or learn more, you can visit the QuickBridge website. If QuickBridge isn’t right for you, also consider National Funding, as it offers a similar product but with slightly more flexibility.

National Funding: Best for Customer Service

Why We Like National Funding

We chose National Funding as the best option for providing high levels of customer service. It retains the majority of its loans in-house and pairs you with an advisor upon applying—something that’s done so its team can learn more about your business needs to give you the best financing option available.

With National Funding, you can get both business loans and equipment financing. It does offer some of the lowest loan amounts of this guide alongside QuickBridge; however, it is still an excellent provider to consider. With bad credit, it’s highly recommended that you have strong business finances before applying with National Funding, as there are limited exceptions with its credit score requirement. Its other requirements for time in business and revenue are minimums, and satisfying those criteria does not guarantee an approval.

Notably, instead of a traditional interest rate, this provider charges factor rates. If you don’t qualify for the best pricing because of a lower credit score, you can still save some money as National Funding offers early payment discounts of up to 7% on certain loans.

To learn more or to apply, you can visit the National Funding website.

Credibly: Best Provider for Merchant Cash Advances

Why We Like Credibly

As an individual lender and not a broker, Credibly offers a wide variety of loan types that include term loans for working capital, MCAs, credit lines, and equipment financing. However, we chose it specifically for merchant cash advances because of its low credit requirement, alongside low time in business and revenue requirements.

Similar to National Funding, Credibly offers factor rates for well-qualified businesses that start as low as 1.11×. With bad credit, however, you should expect to see rates between 1.30× and greater. For its other loan offerings, credit score requirements tend to be higher, so it’s best suited for bad credit borrowers in need of a cash advance to support their business.

To learn more, you can visit the Credibly website. There, you can submit an online loan application within just 10 minutes.

FundThrough: Best for Invoice Factoring

Why We Like FundThrough

If your business has issued invoices to clients but you have not yet received payment, we chose FundThrough as a provider since it can issue you an advance with its invoice factoring program. There are no minimum credit score requirements, which makes this an excellent option to consider if you have been unable to obtain financing elsewhere because of your company’s credit.

While other providers like Clarify Capital also offer invoice factoring, FundThrough specializes in this form of financing and works with a wide variety of business industries that can take advantage of its expertise. You can visit the website to learn more about FundThrough’s eligible industries. There, you can also submit an application if it meets your business needs.

FundThrough works best if you use accounting software, as doing so allows you to select invoices you’d like to get funding for. If approved, you can then receive funding to the business bank account you’ve designated. Eligibility is usually determined by the creditworthiness of the customer.

How We Chose the Best Business Loans for Bad Credit

We considered the following characteristics when selecting the best bad credit business loans:

• Minimum credit score requirement
• Other qualification requirements such as time in business and revenue
• Interest rates and estimated APRs
• Loan amount and repayment terms
• Ease of application
• Documentation requirements
• Application, approval, and funding speeds
• Types of loans offered
• Customer reviews and ratings

How to Choose a Loan Provider

When choosing a provider, you’ll want to make sure that you have the budget to meet repayment expectations and that the rates and terms offered meet your business needs. In comparing lenders, you should consider the following before committing to an agreement:

• Determine your financing needs: Map out how much you plan to borrow, how you plan to repay the loan, and how you plan to use the funds for your business.
• Review lender qualification requirements: You should aim to meet the minimal qualifications for the best odds of approval. Factors commonly considered are credit score, time in business, and annual revenue.
• Compare loan costs and terms: Compare the various rates, terms, and fees offered by the lenders you think may fit the bill. Be sure to evaluate the total costs and if you can afford it before you enter into a loan agreement.

Alternatives to Bad Credit Business Loans

If you are still having trouble getting approved for a loan or are looking for ways to get funding at lower interest rates, you can consider the following alternatives:

• Rollover for business startups (ROBS): A ROBS is a way for you to access funds in your retirement accounts tax- and penalty-free. It’s not a loan, so you won’t be paying any interest charges. It is a complex transaction with the potential for fines and penalties if done incorrectly though, so we recommend using the services of one of the best ROBS providers to walk you through the process.
• Loans from friends and family: If you can’t get approved for a loan, you could bypass the traditional lending requirements of a bank by asking friends or family for funding. Another benefit of this method is the possibility of securing a more competitive rate. See our guide on how to ask friends or family to fund your business.
• Angel funding: With angel funding, you’ll be required to give up a portion of your ownership interest in exchange for funding. It’s not a loan that needs to be repaid, so it’s a way to avoid paying interest fees. Read our guide on what angel funding is to help you decide if it’s right for you.
• Personal loans for business: If you don’t qualify for a traditional business loan, you can apply for a personal loan if you have strong personal finances and credit history. While loan amounts may be lower, these loans are typically easier to qualify for. Funds can also be used for a variety of uses, including business financing. Check out our guide on the best personal loans for business funding to find a provider.

Frequently Asked Questions (FAQs)

What is the best business loan for bad credit?

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What is the minimum credit score needed for a business loan?

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Is it expensive to get a business loan with bad credit?

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Bottom Line

Although you won’t qualify for a lender’s lowest advertised rates, you’ll still have plenty of financing options even with bad credit. The best business loans for bad credit we’ve selected offer many different types of loans with easy qualification requirements. Before you make any final decisions, we recommend shopping rates with at least a handful of lenders to ensure you find a lender that meets your business needs and budget.

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User rating references:

^[1]Trustpilot | Lendio