5 Best Business Loans for Bad Credit
Tom has 15 years of experience helping small businesses evaluate financing and banking options. He shares this expertise in Fit Small Business’s financing and banking content.
This article is part of a larger series on Business Financing.
Many business owners cannot qualify for traditional business loans because they have bad credit scores, but several online lenders offer small business loans and lines of credit to borrowers with credit scores of 600 and lower. These lenders provide a potential lifeline to businesses in need of financing; however, borrowing costs will be higher because of the risk of extending credit to someone with a poor credit score.
In evaluating the best business loans for bad credit, we looked at lender minimum requirements, cost of borrowing, terms, application process, customer service, and funding speed, placing more focus on the first two factors. We also looked for lenders who could offer multiple financing options to clients. These options include term loans, lines of credit, equipment financing, and invoice factoring.
Lender | Best For | Minimum Credit Score |
|---|---|---|
Overall financing terms | 600 | |
Longer-term financing | 550 | |
Line of credit | 560 | |
Fast approval | 500 | |
Early payment discounts | 500 |
Fundbox: Best Overall Financing Terms
 | |||
Maximum Loan Amount | $100,000 | Payment Frequency | Weekly |
Minimum Credit Score | 10% to 79% | Repayment Term | Up to 52 weeks |
Starting Annual Percentage Rate (APR) | Weekly | Funding Speed | Next day |
Time In Business | 12 or 24 weeks | Minimum Revenue | $100,000 |
Why We Like Fundbox: Fundbox offers both revolving lines of credit and term loans for borrowers. Fundbox only requires businesses to be in operation for 6 months and owners to have a credit score of 600 to qualify. It also offers a reasonable starting annual percentage rate (APR); however, borrowers with poor credit should expect higher rates. Fundbox offers next-day funding.
Rapid Finance: Best for Longer-term Financing
 | |||
Maximum Loan Amount | $1 million | Payment Frequency | Daily, weekly, or monthly |
Minimum Credit Score | 550 | Repayment Term | Up to 60 months |
Starting APR | 9% | Funding Speed | Next day |
Time In Business | 2 years | Minimum Revenue | $120,000 |
Why We Like Rapid Finance: Rapid Finance provides lending options with terms of up to 5 years. For most loan types, businesses need to be in operation for 2 years; however, for merchant cash advances, the requirement is only 3 months. Rapid Finance’s payment plans are flexible, offering daily, weekly, and monthly options.
Lendio: Best Line of Credit Options
 | |||
Maximum Loan Amount | $500,000 | Payment Frequency | Weekly |
Minimum Credit Score | 560 | Repayment Term | 24 months |
Starting APR | 8% | Funding Speed | 1 to 2 weeks |
Time In Business | 6 months | Minimum Revenue | $120,000 |
Why We Like Lendio: Lendio is a business financing platform that matches applicants to more than 75 funders. Lendio can offer multiple options for business owners with poor credit, including term loans and lines of credit. While funding speed is slower compared to others in our guide, Lendio provides the best opportunity to shop around and find a competitive offer.
Credibly: Best for Fast Approvals
 | |||
Maximum Loan Amount | $400,000 | Payment Frequency | Daily or Weekly |
Minimum Credit Score | 500 | Repayment Term | 6 to 18 months |
Starting APR | 15% | Funding Speed | 1 day |
Time In Business | 6 months | Minimum Revenue | $180,000 |
Why We Like Credibly: Credibly offers working capital loans for businesses whose owners have credit scores as low as 500, providing up to 18 months of needed working capital in a term loan. Loan amounts can be as small as $5,000, which provides added flexibility if a business needs just a small boost of working capital. Business expansion loans are also available for borrowers with credit scores of at least 600, provided they have been in business for 3 years.
National Funding: Best for Discounts for Paying Early
 | |||
Maximum Loan Amount | $500,000 | Payment Frequency | Daily |
Minimum Credit Score | 500 | Repayment Term | 15 months |
Starting APR | 17% | Funding Speed | 1 to 2 days |
Time In Business | 12 months | Minimum Revenue | $250,000 |
Why We Like National Funding: National Funding offers fast approvals (as quickly as one day) and will approve loans for borrowers with credit scores as low as 500. Interest rates and fees can be rather steep—as high as 38% including origination fees—and payments typically are made daily. However, if you have poor credit, National Funding is an option worth pursuing, given that their borrowing requirements are incredibly fair. Discounts are also given to those businesses that pay off their loans early.
Bottom Line
Business owners with bad credit shouldn’t be discouraged if they are rejected for a traditional bank loan because there are many lenders who may offer financing. Depending on your personal and business situation, each of these lenders will consider you and possibly extend an offer of credit.
