The best bad credit business loans have a credit score requirement no greater than 600. While you may not qualify for the best rates without a higher score, these lenders should still offer competitive rates compared to the majority of other banks. They should also offer a combination of excellent customer service, fast funding speeds, and low documentation requirements.
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 real estate loans.
Here are our picks for the nine best business loans for bad credit:
- Lendio: Best overall for multiple lender and loan options
- SBG Funding: Best for custom payment terms and fast funding
- Clarify Capital: Best for short-term financing
- Smarter Finance USA: Best for vehicle and equipment financing
- QuickBridge: Best for easy paperwork requirements
- National Funding: Best for customer service
- 1West: Best for fast, automated loan options
- FundThrough: Best for invoice factoring
- Credibly: Best provider for multiple loan types
Get the Best Business Financing with Expert Guidance from SBG Funding |
|
Best Bad Credit Business Loans At a Glance
Minimum Credit Score | Annual Revenue Requirement | Minimum Time in Business | Maximum Loan Amount | Estimated Starting Annual Percentage Rate (APR) | Maximum Repayment Term | |
---|---|---|---|---|---|---|
$50,000 to $120,000 | 0 to 12 months | $10 million | Varies | 10 years | ||
600 | $350,000 | 6 months | $10 million | Varies | 7 years | |
500 | $120,000 | 6 months | $5 million | Varies | 6 years | |
None; 600 recommended | None | None | $1 million | 7% | 5 years | |
600 | $250,000 | 6 months | $500,000 | Varies | 16 months | |
600 | $250,000 | 6 months | $500,000 | Varies | 5 years | |
500 | $120,000 | 3 months to 2 years | $10 million | Varies | 5 years | |
None | $100,000 | None | Varies | 33% to 70%-plus | 90 days | |
500 | $180,000 | 6 months | $10 million | 10.5% | 24 months | |
Lendio: Best Overall for Multiple Lender and Loan Options
Rates & Terms | |
Starting Interest Rate | 5.5% to 60%-plus, depending on loan program |
Estimated APR | Varies |
Loan Amount | Up to $10 million depending on loan program |
Repayment Term | Typically up to 10 years |
Repayment Schedule | Monthly, but can vary by program |
Funding Speed | As fast as 24 hours; varies by loan program |
Loan Type | Accounts receivable (A/R) financing, business line of credit, term loan, cash advance, equipment financing, startup loans, and business acquisition loans |
Qualifications | |
Credit Score |
|
Time in Business | 0 to 12 months, depending on loan program |
Revenue | $50,000 to $120,000, depending on loan program |
Why We Like Lendio
Lendio is a broker that has partnerships with more than 75 different lenders. A major advantage of this is that it allows borrowers access to a wide range of loan programs with just a single application to Lendio. As each lender has its own eligibility criteria, 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, evidenced by the fact that it currently has over 20,000 reviews on Trustpilot with a 4.8-star rating out of 5. You can visit the Lendio website to learn more or to apply. Applications can be completed in minutes, after which you’ll be contacted by a funding manager for next steps.
SBG Funding: Best for High Approval Rates and Multiple Loan Types
Rates & Terms | |
Starting Interest Rate |
|
Estimated APR | Varies |
Loan Amount |
|
Repayment Term |
|
Repayment Schedule | Biweekly, weekly, monthly |
Funding Speed | As fast as same day |
Loan Type | Term loan, line of credit, equipment financing, invoice financing, and bridge capital |
Qualifications | |
Credit Score | 600 (650 for term loans) |
Time in Business | 6 months |
Revenue | $350,000 annually |
Why We Like SBG Funding
SBG Funding, one of our top working capital loans, is an excellent option to consider for custom payment options and fast funding speeds. It has the ability to issue customized payment plans to suit your company’s cash flow needs, including the possibility of providing deferred payments for up to three months. It can also issue decisions within 24 hours with same-day funding available.
Other requirements to qualify include at least six months’ time in business and annual revenue of $250,000 or more. However, the specific requirements may vary slightly depending on the type of loan you’re getting. Rates also vary depending on the loan you’re getting but, generally, start as low as 1.75% per month for those with excellent credit.
Applying with SBG Funding will not negatively impact your credit score. 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.
SBG Funding works with businesses in a wide range of industries. This includes those in healthcare, construction, automotive services, retail, transportation, restaurants, and more. Visit the SBG Funding website to learn more or to apply.
Since we last covered SBG Funding, it has increased the qualification requirements on some of its loan programs. At the same time, it has expanded some of the terms offered, including a higher loan amount on its credit lines and term loans. 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.
Clarify Capital: Best for Short-term Financing
Rates & Terms | |
Starting Interest Rate | Varies |
Estimated APR | Varies |
Loan Amount | Up to $5 million |
Repayment Term | 6 to 24 months (up to 72 months for equipment financing) |
Repayment Schedule | Varies |
Funding Speed | As fast as 24 hours |
Loan Type | Short-term business loan, business line of credit, equipment financing, invoice factoring, merchant cash advance (MCA) |
Qualifications | |
Credit Score | 550 |
Time in Business | 6 months |
Revenue | $120,000 annually |
Why We Like Clarify Capital
Clarify Capital offers a wide range of loan types, but unless you’ll be applying for equipment financing, repayment terms will typically be limited to 24 months. While some other providers on our list also have short repayment terms, 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.
Clarify Capital is also a loan broker and has a network of more than 75 lenders. 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. However, you won’t typically have to wait long. The application process is quick and can be completed in less than 2 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.
Smarter Finance USA: Best for Vehicle and Equipment Financing
Rates & Terms | |
Starting Interest Rate | Varies |
Estimated APR | 7% to 20%-plus |
Loan Amount | $10,000 to $1 million |
Repayment Term | 2 to 5 years |
Repayment Schedule | Weekly, monthly, seasonal, and deferred |
Funding Speed | 1 to 4 days |
Loan Type | Equipment financing |
Qualifications | |
Credit Score | None, but 600 is recommended |
Time in Business | None |
Revenue | None |
Why We Like Smarter Finance USA
Smarter Finance USA specializes in financing a variety of vehicles for business purposes. This includes excavators, cranes, bulldozers, and trucks. It is a broker with nearly 40 lenders in its network and has no minimum requirements for credit score, time in business, or revenue.
With that said, 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 with credit scores below 600 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 10 minutes, and you could get funded within one to four days.
QuickBridge: Best for Easy Paperwork Requirements
Rates & Terms | |
Starting Interest Rate | Factor rates as low as 1.11x |
Estimated APR | Varies |
Loan Amount | $10,000 to $500,000 |
Repayment Term | 4 to 16 months |
Repayment Schedule | Daily and weekly |
Funding Speed | As fast as 24 hours |
Loan Type | Term loan |
Qualifications | |
Credit Score | 600 |
Time in Business | 6 months |
Revenue | $250,000 annually |
Why We Like QuickBridge
QuickBridge is an excellent option 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 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 to most other lenders, 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
Rates & Terms | |
Starting Interest Rate | Factor rates as low as 1.11x |
Estimated APR | Varies |
Loan Amount |
|
Repayment Term |
|
Repayment Schedule |
|
Funding Speed | As fast as 24 hours |
Loan Type | Term loan, working capital, and equipment financing |
Qualifications | |
Credit Score | 600 |
Time in Business | 6 months (2 years for equipment financing) |
Revenue | $250,000 annually |
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 business loans and equipment financing. It’s important that you have a minimum credit score of at least 600 as exceptions are rarely issued. Its other requirements for time in business and revenue are minimums, and satisfying those criteria does not guarantee an approval. With bad credit, it’s highly recommended that you have strong business finances before applying with National Funding.
Instead of a traditional interest rate, this provider charges factor rates as low as 1.11x for businesses with excellent credit. If you don’t qualify for the best pricing due to 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.
1West: Best for Fast, Automated Loan Options
Rates & Terms | |
Starting Interest Rate |
|
Estimated APR | Varies |
Loan Amount |
|
Repayment Term |
|
Repayment Schedule | Varies |
Funding Speed |
|
Loan Type | Working capital term loan, A/R financing, line of credit, and equipment financing |
Qualifications | |
Credit Score |
|
Time in Business |
|
Revenue | $120,000 annually |
Why We Like 1West
If you’re looking to get loan options without speaking to anyone over the phone or in person, 1West is an excellent option to consider. It utilizes an automated engine, called ABLE (Automated Business Lending Engine) that can provide loan options 24/7. 1West has a partnership with over 50 lenders, something that can improve your chances of getting the financing you need.
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 24 hours. You can visit the 1West website to learn more about each of its loan programs or to start the application process.
FundThrough: Best for Invoice Factoring
Rates & Terms | |
Starting Interest Rate |
|
Estimated APR | 33% to 70% |
Loan Amount | Varies |
Repayment Term | Up to 90 days |
Funding Speed | 1 to 5 days after time of application |
Loan Type | Invoice factoring |
Qualifications | |
Credit Score | None |
Time in Business | None |
Revenue | $100,000 annually |
Why We Like FundThrough
If your business has issued invoices to clients but you have not yet received payment, FundThrough 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 due to your company’s credit.
With invoice factoring, you’ll typically get a percentage of the outstanding invoices you’ve issued to your customers. When your customers are ready to pay the invoice, they will issue payment to the factoring company. Once completed, the factoring company will issue the remaining balance owed to you, minus its fees. You can learn more in our guide on how invoice factoring works.
FundThrough works best if you utilize 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.
To learn more or to apply for invoice factoring, you can visit the FundThrough website.
Credibly: Best Individual Provider for Multiple Loan Types
Rates & Terms | |
Starting Interest Rate | Factor rates as low as 1.11x |
Estimated APR | Varies by loan product |
Loan Amount |
|
Repayment Term |
|
Repayment Schedule | Varies by loan product |
Funding Speed | As fast as same day |
Loan Type | Working capital, MCA, line of credit, equipment financing, and invoice factoring |
Qualifications | |
Credit Score | Typically 500, but may vary by loan program |
Time in Business | 6 months but 1 year is recommended |
Revenue |
|
Why We Like Credibly
For an individual lender and not a broker, Credibly offers the largest variety of loans on our list. As a result, you have a high chance of finding a loan well-suited for your needs and goals. Available loan types include term loans for working capital, MCAs, credit lines, and equipment financing,
Qualification requirements will vary depending on the loan you apply for. For example, MCAs may have credit score requirements as low as 500 while credit lines typically require 650. Other requirements for time in business and revenue can vary, but you’ll generally need at least six months and $180,000, respectively.
Factor rates for well-qualified businesses start as low as 1.11x. With bad credit, you should expect to see rates between 1.30x and greater.
To learn more about which type of loan may be best for you, visit the Credibly website. There, you can submit an online loan application within 10 minutes and receive a decision as quickly as the same business day.
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
- Documentation requirements
- Application, approval, and funding speeds
- Types of loans offered
- Customer reviews and ratings
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 alternatives. However, we recommend first reading our guide on how to get a small business loan for tips on improving your approval odds as well as getting more favorable rates and terms.
- 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.
Frequently Asked Questions (FAQs)
Yes, it can be difficult to get a business loan with bad credit. Lenders view borrowers with low credit scores as being more likely to miss payments and default on a loan. You can improve your chances of getting approved with compensating factors, such as having a larger down payment or demonstrating a track record of strong cash flow.
Many providers can issue a business loan with a credit score as low as 500. Some lenders may not even have a credit score requirement depending on the type of loan you choose. In addition to the credit score, lenders may look at the details of your credit history, such as late payments, bankruptcies, and collections.
You’ll typically see higher rates and fees if you have a lower credit score. However, you can mitigate this if you can document other strengths of your business, such as strong revenue and cash flow.
Bottom Line
Although you won’t qualify for a lender’s lowest advertised rates, you’ll still have plenty of options even with bad credit. The lenders 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.