6 Best Business Loans for Bad Credit 2019

Borrowers with credit scores below 600 have difficulty qualifying for financing. Every lender checks your credit score. However, lenders offering the best business loans for bad credit evaluate additional aspects of your business to get you qualified. We evaluated online lenders and selected the best bad credit business loans to save you time when applying.

It’s no secret why Fundbox is our recommended bad credit business loan provider, as it is one of the few lenders on this list with no minimum credit score requirement. The starting APR is 10% and you can borrow up to $100,000. You can get prequalified in a few minutes and funded in as fast as 24 hours.

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Top 6 Bad Credit Business Loans 2019

When to Use a Marketplace

We’ve listed the top 6 lenders for working capital loans that we believe are the best choices for small businesses. If none of these lenders address your financing needs or you would like to submit a single application for multiple offers, a marketplace is the best way to do that. It takes a few minutes and some basic information to apply and review your loan options.

For those looking for working capital for their business, take a look at LendingTree. Its online marketplace has a large number of lenders allowing you to compare rates, offers, and find a good fit. Seeing your options takes just a few minutes.

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How We Evaluated the Best Business Loans for Bad Credit Borrowers

When evaluating the best loans for businesses with bad credit, we emphasized credit requirements, total costs, and the flexibility of terms. According to a survey of small business owners by the Federal Reserve In 2018, 50% of business owners could not get traditional financing due to their credit score and needed convenient, inexpensive, quick, and flexible options. The same year, a different survey found that 54% of small business owners with poor credit worked with online lenders.

Based on the needs of bad credit business loan borrowers, the criteria we used to evaluate the best loans include:

• Credit score requirements: Loan approval is based on the personal credit score of the owner(s) of the business. We selected lenders with minimum credit score requirements of 600 or less for this list, which meant we focused primarily on alternative lenders.
• Total cost (APR): How much the bad credit business loan will cost you. You can expect higher costs from alternative lenders, according to a Harvard Business School study. This is because they are willing to extend credit to borrowers with lower credit scores compared to traditional lenders.
• Loan terms: We considered loan terms to see which loans provided the most options for borrowers as it relates to the amount of working capital you could borrow, the term of the loan, and repayment options available.
• Qualification requirements: What factors, besides credit score, the provider considers when qualifying you, such as time in business, annual revenue, collateral, and personal guarantee requirements.

Taking these factors into consideration, we are confident in recommending Fundbox as the best business loan for bad credit borrowers who have been in business for over six months. Fundbox has no minimum credit score requirement, offers next day funding up to $100,000 with a 10% starting APR, and terms up to 24 weeks.

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Fundbox: Overall Best Business Loan for Bad Credit

Fundbox offers a revolving line of credit you can draw against without having to reapply. Funding is available in 24 hours for up to $100,000 at 10% to 79% APR. Additionally, Fundbox only requires six months in business and has no minimum credit score requirement, making it the lender with the lowest minimum qualifications on our list.

Fundbox Costs

Fundbox does not provide a range for its fees, stating only its lowest rates on its website. Based on the lowest possible APR of 10%, provided to us by Fundbox, the starting costs for a $10,000 Fundbox bad credit business loan is $466. Fundbox gives you the opportunity to repay your loan early and save some money, similar to Kabbage.

The total costs for a Fundbox line of credit are:

• Total fee: 4.66% of the draw amount for 12 weeks and 8.99% of the draw amount for 24 weeks
• Effective weekly fee: 0.5% to 0.7%
• Estimated APR: 10% to 79%
• Origination fee: None
• Prepayment penalty: None; your business can save money by repaying the loan early

Fundbox disclosed its APR range when we requested it, citing APRs from 10% to 79% for its line of credit. This makes it one of the lowest cost lenders on our list of bad credit business loans, especially since you only pay interest while the debt is outstanding, instead of the entire term.

Fundbox Terms

Fundbox lines of credit have repayment terms of 12 or 24 weeks with weekly payments. Although Fundbox’s terms are shorter than other providers, it offers a line of credit like Kabbage that allows you to draw on additional funds after repayment. This is important for poor credit borrowers because it reduces the number of hard credit checks and avoids needing to reapply for a loan.

General terms for a Fundbox line of credit are:

• Loan amount: $1,000 to $100,000
• Repayment term: 12 or 24 weeks
• Repayment schedule: Weekly
• Collateral: Unsecured with a potential blanket UCC filing
• Personal guarantee: Typically not required, but possible
• Speed to funding: 10 minutes to apply with a decision in as few as three minutes; ongoing funding within 24 hours

By offering two options for repayment, business owners can tailor their loan amounts more closely to their needs. With a maximum loan amount of $100,000, and the flexibility to draw as much as needed, the Fundbox line of credit can help businesses that qualify with short-term financing. If you have more than $100,000 in outstanding invoices and need funding, consider comparing Fundbox to BlueVine for your financing needs.

Fundbox Qualifications

There is no minimum credit score requirement with Fundbox, and you can qualify if you have been in business for at least six months. Fundbox will perform a custom-built business health assessment to determine your qualifications. This potentially makes Fundbox one of the least restrictive online lenders, which already collectively have a 62% approval rate for employer businesses and 45% approval rate for solo businesses, according to a Consumer Financial Protection Bureau study.

General qualifications for a Fundbox line of credit are:

• Credit score: No minimum
• Minimum annual revenue: No minimum, but ideally at least $50,000
• Time in business: At least six months

When evaluating lenders, we put emphasis on the required qualifications to ensure that we recommended lenders addressing the needs of the widest range of borrowers. Besides offering a no minimum credit business loan, Fundbox also stands out because it prefers to fund businesses with ideally $50,000 in annual revenue, which allows smaller businesses to qualify for financing.

What Fundbox Is Missing

The largest downside with Fundbox is its $100,000 maximum loan amount. This might be plenty of financing for many businesses, but others will need larger loans. In addition, the weekly payments could be difficult if your business has cyclical cash flow, whereas Kabbage might be a better fit because it offers monthly payments.

Fundbox Reviews

We determined Fundbox has mostly positive ratings. Positive Fundbox reviews said the company had a helpful customer service team. Critical Fundbox reviews came from users who were approved for less funding than they expected. Read more on our Fundbox reviews page.

How to Apply for a Fundbox Loan

Fundbox can get you financed for up to $100,000 based on outstanding customer invoices, even with bad credit. Its APR ranges from 10% and 79% and you can draw funds for 12 or 24 weeks. The online application can be completed within minutes and you can get funded in one business day.

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OnDeck: Best Bad Credit Business Loan for Large, Long-term Projects

OnDeck offers business loans to small businesses with less than perfect credit (at least 600) for up to $500,000. It offers terms up to three years, which is three times as long as LoanBuilder. This makes it the best bad credit business loan for long-term projects, with starting rates of 9% and funding available in one to three business days. Besides a term loan, OnDeck also offers a line of credit.

OnDeck Costs

OnDeck is transparent with its rates, offering information on the weighted average rate for borrowers, which was 49% in the quarter ending in June 2018. The APR for OnDeck loans ranges from 10% to 100%, which we found to be comparable to similar lenders like LoanBuilder, which has a lower credit score requirement.

Some OnDeck Capital term loan rates and fees are:

• Starting interest rates: As low as 9% simple interest for term loans up to 12 months and 9.99% AIR (annualized interest rate) for term loans up to 36 months
• Expected APR: 10% to 100%; 48.7% weighted average AIR as of June 2018
• Origination fee: 0% to 5% of your loan amount

You will have to pay between $1,000 and $10,000 in interest on a one-year, $10,000 loan with OnDeck, making it a relatively inexpensive financing option if you qualify. You don’t have the option to save money if you repay early, like with Kabbage. However, OnDeck offers the longest loan terms among the bad credit business loans for up to three years.

OnDeck Terms

With an OnDeck loan, you can borrow up to $500,000 with repayment terms between three and 36 months. Depending on your credit profile, you can repay your loan with daily or weekly payments. The opportunity to repay loans over 36 months with OnDeck, compared to Kabbage’s 18-month maximum, makes it the best business loan for poor credit borrowers who have long-term capital needs.

The loan terms you can expect from OnDeck for its term loan include:

• Loan amount: $5,000 to $500,000
• Repayment term: Three to 36 months
• Repayment schedule: Daily or weekly
• Collateral: Blanket UCC filing on business assets
• Personal guarantee: Required
• Time to funding: One to three business days

The quick funding from OnDeck is like the other loans we evaluated in our search for the best business loans for bad credit borrowers. Most of the loan options also have comparable collateral and personal guarantee requirements to OnDeck, which allows it to offer less restrictive qualifications than traditional lenders.

OnDeck Qualifications

OnDeck qualifications are stricter than Fundbox’s, but its credit score requirement of at least 600 makes it available to poor credit borrowers. If you have a high enough credit score, have been in business for at least one year, and have at least $100,000 in annual revenues, then you’ll meet OnDeck’s primary minimum qualifications for funding.

General qualifications for an OnDeck loan are:

• Credit score: At least 600 (check your score for free)
• Minimum annual revenue: At least $100,000
• Time in business: At least one year

The OnDeck line of credit is a viable alternative to our recommended bad credit business loan. You can get it in addition to the term loan and use it to address any short-term cash flow needs that arise. OnDeck and BlueVine are the only lenders that offer both lines of credit and term loans; however, OnDeck has slightly lower rates at the top end with similar minimum qualifications.

Other Financing Options Offered by OnDeck

Besides the term loan from OnDeck, your business can qualify for a line of credit. OnDeck’s line of credit is smaller, up to $100,000, and has the same minimum requirements as its term loan. However, it’s revolving, so once you’ve repaid the balance, you can use the line of credit for more financing without reapplying.

The costs, terms, and qualifications of a line of credit from OnDeck are:

• Loan amount: Up to $100,000
• Expected APR: 13.99% to 63.2%, with a 32.6% weighted average as of June 2018
• Repayment terms and schedule: Six or 12 months with weekly payments
• Personal credit score: At least 600 (check your score for free)
• Time in business: At least one year
• Annual revenue: At least $100,000
• Speed of application, approval, and funding: 10 minutes to complete the online application and approval in hours; initial funding as soon as the next day and ongoing funding within 24 hours

You might get a line of credit from OnDeck if you have regular small working capital expenses that require financing. These include payroll, inventory, or other obligations where a term loan would not adequately address the issue. It requires the same online application and can get you funded in as little as one day after approval.

What OnDeck Is Missing

While there are no prepayment penalties with OnDeck, you do not benefit from paying off your loan early. This is because the amount you owe is determined at the time your loan is originated. You will owe the full interest charge if you pay early, unlike Kabbage and Fundbox, which allow you to reduce your overall cost with early repayment.

OnDeck Reviews

OnDeck generally has positive ratings. Users who gave OnDeck Capital positive reviews cited its professional and friendly customer service, along with its quick loan process. Users who gave critical OnDeck Capital reviews said its fees were costly compared to other similar lenders. Read more on our OnDeck reviews page.

How to Apply for an OnDeck Loan

To apply for an OnDeck loan, fill out the online application, which takes about 10 minutes. You’ll know if you qualify within one day and get a business loan with bad credit for up to $500,000 for a term of up to three years at a starting 10% APR.

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LoanBuilder: Best Bad Credit Business Loan With Customizable Terms

LoanBuilder is the best poor credit business loan if you need the flexibility of selecting 13- to 52-week terms on loans up to $500,000, at a similar cost to OnDeck with APRs starting at 12%. If you have a 550 or greater credit score and more than $100,000 in annual revenue, LoanBuilder can fund you in one to three business days.

LoanBuilder Costs

The most recent disclosure of interest rates from LoanBuilder was between 2.9% and 18.72%. Rather than assigning an interest rate to borrowers, you will have the option to select your loan amount and repayment terms, for which you will receive a corresponding interest rate. We estimated its APR to be in line with similar providers, ranging from 12% to 136% based on the interest rate.

The typical LoanBuilder costs are:

• Starting interest rate: 2.9% to 18.72%, applied as a fixed fee to the loan
• Expected APR: 12% to 136%
• Origination or maintenance fee: None
• Prepayment penalty or termination fee: No prepayment penalty, but you owe the interest regardless of when it’s repaid
• Additional fees: None

LoanBuilder charges a fixed fee for its loans, instead of interest over time, which makes it more important to select the right terms. Based on the fee you are offered, your overall cost of capital would be your fee times the loan amount. For example, a $10,000 loan with a 25% fee would cost you roughly $2,500 in interest. Repaying your loan early has no additional benefit because the repayment cost is fixed, but LoanBuilder makes up for this by offering the term flexibility that allows businesses to plan their repayment ahead of time.

LoanBuilder Terms

You can borrow $5,000 to $500,000 from LoanBuilder with repayment terms from 13 to 52 weeks in 24 hours. LoanBuilder automatically deducts loan payments weekly and you can pay off your loan early without additional penalties. Like other lenders on our list, LoanBuilder requires a blanket UCC filing and personal guarantee.

Terms for a LoanBuilder loan include:

• Loan amount: $5,000 to $500,000
• Repayment term: 13 to 52 weeks
• Repayment schedule: Weekly
• Collateral: Blanket UCC filing on business assets
• Personal guarantee: Required
• Speed to funding: 10 minutes to complete its online application with approval in days; ongoing funding within 24 hours of a request

In our evaluation, LoanBuilder received high marks for the flexibility it offers when selecting a loan. Once approved, you will select a loan amount that will have a corresponding term and interest rate that fits your business needs. However, you will need to make weekly payments on the loan, which is more frequent than a provider like Kabbage, which offers monthly payments.

LoanBuilder Qualifications

Minimum qualifications for a LoanBuilder loan are among the lowest of short-term business loan providers. It requires a credit score of at least 550 for the primary borrower, nine months or longer in business, and at least $42,000 in annual revenue.

The minimum qualifications for a LoanBuilder loan are:

• Credit score: At least 550 (check your score for free)
• Minimum annual revenue: At least $42,000
• Time in business: At least nine months

The annual revenue requirement was the lowest we evaluated for our list of the best bad credit business loans. Additionally, the minimum time in the business of at least nine months was roughly average compared to other options we evaluated. This gives smaller and newer businesses an opportunity to qualify for a customizable funding option.

What LoanBuilder Is Missing

Newer businesses may find the nine-month time in business requirement for LoanBuilder too restrictive and may be better served by Fundbox, which only requires six months in business. Additionally, LoanBuilder only offers repayment terms up to a year, which is three times as short as OnDeck, which offers terms up to three years.

LoanBuilder Reviews

We compiled LoanBuilder user reviews from around the web. In so doing, we determined LoanBuilder generally has positive ratings. Customers who provided positive reviews cited the quick and efficient application and funding process. Customers who provided negative LoanBuilder reviews were disappointed with the high cost of the loan. Read more on our LoanBuilder reviews page.

How to Apply for a LoanBuilder Loan

You can apply for a loan up to $500,000 with LoanBuilder online in about 10 minutes. If approved, your rates and terms will be customized to fit your business. You can expect to make weekly payments for 13 to 52 weeks, with an APR ranging from 12% to 136%.

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Kabbage: Business Loan for Bad Credit With Monthly Payments

Kabbage is a short-term working capital lender that offers a business line of credit of up to $250,000 that’s best for businesses needing monthly payments. The starting APR is 24%, which is higher than some other providers, but you can repay it early to save money. You’ll need a 550 credit score or higher to qualify and get funding as soon as the next business day.

Kabbage Costs

The Kabbage line of credit APR, which includes all interest rates and fees, ranges between 24% and 99%, based on our estimates. This includes a loan fee rate of 1.5% to 10%, which makes Kabbage more expensive than Fundbox and OnDeck. A Kabbage loan will cost between $2,400 and $9,900 over the course of a year if you borrow $10,000.

Total costs for a Kabbage line of credit include:

• Interest rates: 1.5% to 10% per month (average fee is 4% for a six-month term and 3% for a 12-month term)
• Expected APR: 24% to 99%
• Origination or maintenance fees: None
• Prepayment penalties or termination fees: None, and you can repay the loan early to save on interest
• Additional fees: None

Kabbage is transparent about its costs, going as far as mentioning both its highest and lowest rates and providing a calculator to borrowers on its website. The fee is charged on a monthly basis, so early repayment allows you to save some money and potentially reduces the overall cost of the loan. There is also no prepayment penalty with a Kabbage loan, so you can pay your loan off early and save on monthly fees, similar to Fundbox.

Kabbage Terms

Kabbage offers up to $250,000 in funding, with repayment terms of six, 12, or 18 months and a monthly repayment cycle. The wide range of potential loan amounts you can receive, along with the variety of repayment terms, help Kabbage match you to the right financing amount for your business. In an interview with Rob Rosenblatt, Head of Lending at Kabbage, he emphasized the lender’s focus on providing the right funding amount to small businesses.

General terms for a Kabbage line of credit are:

• Line of credit amount: $2,000 to $250,000
• Draw amount: $500 to $250,000, or any size with the Kabbage Card
• Repayment term: Six, 12, or 18 months
• Repayment schedule: Monthly
• Collateral: Blanket UCC filing on business assets
• Personal guarantee: Required
• Speed to funding: 10 minutes to complete its online application and approval within 10 minutes to a few hours; initial funding as soon as the next business day and ongoing funding within 24 hours or immediately using its connected Kabbage Card

The terms offered by Kabbage stand out because of its monthly repayment options. This gives an option for businesses that are waiting to collect payments or have some seasonality to its cash flows. Furthermore, a Harvard Business School study found that 70% of small business owners needed $250,000 or less to fund their business, making Kabbage a great choice.

Kabbage Qualifications

The minimum qualifications are a 550 or higher credit score, at least one year in business, and a minimum of $50,000 in annual business revenue. Compared to LoanBuilder, its minimum qualifications are slightly stricter, requiring at least a year in business and a 550 or higher credit score. This makes Kabbage a good option to consider for its monthly payments and low minimum annual revenue requirements.

General qualifications for a Kabbage line of credit are:

• Credit score: At least 550 (check your score for free)
• Minimum annual revenue: At least $50,000 (or at least $4,200 per month for the past three months)
• Time in business: At least one year

The credit score requirement for Kabbage is 550, which is low considering the terms of repayment it offers. However, it’s higher than a lender like National Funding, which has no minimum requirement. If you are unsure of how much you need to borrow and can meet the qualifications, receiving a line of credit can prepare your business to meet financing needs when they come up.

What Kabbage Is Missing

Kabbage does not offer additional financing options and has a relatively high starting interest rate. As an alternative, consider OnDeck, which offers a term loan with repayment terms up to 36 months in addition to a line of credit to meet the needs of small businesses. Also, while low at 550, Kabbage sets a minimum credit score requirement, which Fundbox does not do.

Kabbage Reviews

Kabbage has mostly positive ratings. Users who gave positive reviews said its customer service provided clear explanations and guided them through the borrowing process. Negative Kabbage reviews expressed disappointment about not being approved for funding or cited higher than expected rates, but Kabbage discloses its rates up front. Read more on our Kabbage reviews page.

How to Apply for a Kabbage Loan

It takes about 10 minutes to complete Kabbage’s online application. Its line of credit is up to $250,000, with an APR of 24% to 99% with monthly payments. You can receive funding in as soon as 24 hours after applying and receiving approval.

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BlueVine: Best Bad Credit Loan for B2B Invoicing Businesses

BlueVine is a great option for businesses with outstanding business-to-business (B2B) or business-to-government (B2G) invoices over $5,000 due in the next 90 days. It requires at least a 530 credit score and three months in business to be considered. Its invoice factoring facility has the highest loan limit we evaluated at $5 million and a low starting APR at 13%. BlueVine also offers a term loan and lines of credit up to $250,000 for supplemental financing.

BlueVine Costs

BlueVine invoice factoring costs start at 0.25% per week, which is potentially the least expensive option if your invoices are maturing soon. It will advance 85% to 90% of each invoice up front, and once the customer pays off the invoice, it will pay you whatever remains after fees are taken out.

The typical BlueVine rates and fees for invoice factoring are:

• Discount rate: 0.25% to 1.35% per week
• Estimated APR: 13% to 70%
• Origination or maintenance fees: None
• Prepayment penalties or termination fees: None
• Additional fees: $15 wire fee; automated clearing house (ACH) is free

BlueVine was transparent about its fees when we called, reporting its highest rates to be 1.35% per week on invoice factoring and provided us with an APR range of 13% to 70%. Factoring $10,000 in invoices will cost from $320 to $1,700 over the course of 90 days. Compared to OnDeck, BlueVine offers shorter terms but allows much higher borrowing limits.

BlueVine Terms

Invoice factoring with BlueVine is available for up to $5 million per month in invoices. You’ll typically receive 85% to 90% of the invoice value up front. When your customers repay the invoices, you’ll receive the difference less a fee. The application for BlueVine invoice financing takes 10 minutes to complete, with funding available as soon as the next business day.

General terms for invoice factoring with BlueVine are:

• Loan amount: $5,000 to $5,000,000 per month
• Advance rate: 85% to 90% on invoices with face values of $500 or higher to B2B customers
• Repayment terms and schedule: Advances are repaid as customers pay their invoices
• Personal guarantee: Required
• Initial approval speed: 10 minutes
• Time to funding: One to three business days

Compared to other loans we evaluated, the loan amounts for BlueVine stood out. One downside is the B2B and business-to-government (B2G) invoicing requirement, making the loan inaccessible for some small businesses. However, for qualified businesses with a high volume of invoices, the $5,000,000 maximum is the highest loan amount on our list.

BlueVine Qualifications

BlueVine only requires a minimum 530 credit score, at least $100,000 in annual revenue, and three or more months of business history to qualify for invoice financing. You also need to invoice creditworthy B2B or B2G customers, since their repayment pays off the loan.

The qualifications BlueVine will use to evaluate you for invoice factoring include:

• Credit score: At least 530 (check your score for free)
• Time in business: At least three months
• Annual revenue: At least $100,000

The annual revenue requirements to qualify for BlueVine invoice factoring are tied for highest on our list with OnDeck. However, in our evaluation, the relatively short amount of time in business and low credit requirements make BlueVine a great option for newer businesses with numerous invoices needing financing.

Other Financing Options Offered by BlueVine

If your business does not invoice its customers, and you need funding for a large project or recurring cash flow shortfalls, you can qualify for a BlueVine term loan or line of credit. Both offer up to $250,000 to borrowers with a minimum credit score of 600, have been in business for at least six months, and have $100,000 or more in annual revenue.

The costs, terms, and qualifications of a bad credit business loan from BlueVine are:

• Loan amount: $5,000 to $250,000
• Interest rate: 4.8% to 47.1% simple interest; fixed (interest fee accrued up front, no savings for early prepayment)
• Expected APR: 18.2% to 78%
• Repayment terms and schedule: Six or 12 months with weekly payments
• Personal credit score: At least 600 (check your score for free)
• Time in business: At least six months
• Annual revenue: At least $100,000
• Speed of application, approval, and funding: 10-minute application with funding as soon as the next day

The rates, terms, and qualifications for a business line of credit from BlueVine are:

• Loan amount: Up to $250,000
• Interest rate: As low as 4.8% of the amount drawn for 26 weeks
• Expected APR: 15% to 78%
• Repayment terms and schedule: Weekly or monthly; only the 12-month repayment term offers the ability to repay monthly
• Personal Credit score (check your score for free):
  • 600 or higher for a six-month term with weekly payments
  • 650 or higher for a 12-month term with monthly payments
• Time in business: At least six months
• Annual gross business revenue:
  • $100,000 and higher for a six-month term with weekly payments
  • $500,000 and higher for a 12-month term with monthly payments
• Speed of application, approval, and funding: 10 minutes to apply and funding as soon as the next day; ongoing funding the next day for free via an ACH or same day for a $15 fee via wire transfer

With similar funding amounts and similar requirements, whether you apply for a loan or a line of credit with BlueVine depends on how you plan on using the funds. The line of credit can be used to supplement shortfalls or the time between invoices to factor when your business needs funding. On the other hand, you can leverage the potentially lower rates of the term loan to finance a larger purchase or project.

What BlueVine Is Missing

While BlueVine offers great funding options, you need to have B2B or B2G invoices to benefit from this service if you have bad credit, which is not necessary with the others on our list. The benefit, however, is that you can qualify for a significantly higher loan amount of up to $5 million. As an alternative, BlueVine also offers a line of credit and term loan, or you could consider working with Fundbox.

BlueVine Reviews

We considered BlueVine reviews by users from around the web. In so doing, we determined it generally has positive ratings. Positive BlueVine reviews came from customers who were impressed with its helpful customer support team. Critical BlueVine reviews came from businesses unhappy about being denied financing. Read more on our BlueVine reviews page.

How to Apply for a BlueVine Loan

You can apply to BlueVine via its online application in 10 minutes. When approved, you can get funded as soon as the next day for invoice factoring up to $5 million with an 85% to 90% advance rate at an estimated APR of 13% to 70%.

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National Funding: Alternative for Bad Credit Borrowers Who Accept Credit Cards

National Funding‘s merchant cash advance (MCA) working capital loan is a good solution for businesses with poor credit that accept credit cards and need financing up to $250,000. Compared to the other options we evaluated, an MCA is an expensive (30% to 150% APR) funding source and should only be a last resort.

National Funding Costs

National Funding merchant cash advances are designed for high-risk borrowers unable to get access to credit anywhere else. To get a rate for your business, you need to contact National Funding directly for a customized quote because it is not transparent about its rates. Our evaluation showed it is the most expensive option on the list, with a top range APR of 150%.

The typical National Funding merchant cash advance costs are:

• Starting factor rate: 1.1 to 1.6 times the loan amount
• Estimated APR: 30% to 150% APR; customized for each borrower
• Origination or maintenance fees: None
• Prepayment penalties or termination fees: None
• Additional fees: None

For a one-year loan term with National Funding, you can expect to pay between $3,000 and $15,000 in interest for a $10,000 loan, based on the APR range we calculated. This makes a merchant cash advance an expensive option, and it should only be considered after your business has exhausted all other funding sources.

National Funding Terms

With National Funding merchant cash advances, terms are customized based on the needs of each business. Your advances and ultimate repayment will be based on the level and type of credit card payments you accept. Most borrowers will be required to make daily payments, based on a percentage of their daily credit card settlement.

The loan terms for a National Funding merchant cash advance include:

• Loan amount: Up to $250,000
• Repayment terms and schedule: Up to 18 months with automatic deductions based on a set percentage of your credit card sales each time they are batched
• Collateral: Unsecured (blanket UCC filing on business assets is likely)
• Personal guarantee: Likely required
• Speed to funding: Quick online application with approval as soon as the same day and funding in as few as 24 hours

The speed of approval for National Funding is comparable to the other loans we evaluated, and the repayment terms are typical for a merchant cash advance. However, borrowers who can qualify for other options before trying National Funding should exhaust those options first.

National Funding Qualifications

Qualifying for National Funding is easier than most of the other lenders we checked, requiring no minimum credit score and one year of operations. According to an FDIC survey of major banks, 92% of traditional lenders consider your credit score as the most important factor for approval, which makes National Funding a great alternative. However, you need to have at least $3,000 per month in credit card sales for this to be an option.

When evaluating you for a merchant cash advance, National Funding considers:

• Credit score: No minimum requirement
• Time in business: At least one year
• Annual revenue: No requirement, but you must have monthly credit card transactions over $3,000
• Required documentation: Credit card statements for four months

The largest hurdle for many businesses will be its time in business requirement. However, for established businesses with poor credit, National Funding provides an opportunity to build a relationship and apply for its other products as your credit improves.

Other Financing Options Offered by National Funding

Another financing option offered by National Funding is its term loan. Businesses will need a credit score of at least 500, with $100,000 in annual revenue to qualify. This makes it a great funding source for borrowers with poor credit, especially if their business is more established.

The costs, terms, and qualifications of a bad credit business loan from National Funding are:

• Loan amount: $5,000 to $500,000
• Starting interest rate: 8%
• Expected APR: 10% to 136%
• Repayment terms and schedule: Weekly payments for three months to a year
• Personal credit score: At least 500 (check your score for free)
• Time in business: At least one year
• Annual revenue: At least $100,000
• Speed of application, approval, and funding: 20-minute application, with an approval decision the same day, and funding as soon as the next business day

When you are considering financing a large project, a term loan is often easier to plan around than a merchant cash advance. This is because your payments are set and you can often get longer overall terms. The rates on a loan from National Funding are lower than its merchant cash advance, but having the option to move up to better financing makes it stand out among merchant cash advance providers.

What National Funding Is Missing

A National Funding merchant cash advance provides a financing option for businesses with poor credit that have been operational for at least a year. This means it is only an option for established businesses. If you are a newer business with poor credit, take steps to improve your personal credit score.

National Funding Reviews

We determined that National Funding has a mix of positive and negative ratings. Customers who gave positive National Funding reviews said the application process was quick and easy. Customers who gave negative National Funding reviews complained about the interest rates and hidden charges. Read more on our National Funding reviews page.

How to Apply for a National Funding Loan

With National Funding, you can apply online and receive the same or next day approval for up to $250,000. Due to the high cost of a merchant cash advance, it is only recommended if your other options have been exhausted.

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Alternative Bad Credit Business Loans

Some business loans available to bad credit borrowers have specific requirements based on how you receive payments from your customers. For example, Square Capital and PayPal Working Capital both offer to finance you if you use its services to process payments, and neither one requires a credit check. You can also qualify for some business credit cards, which offer rewards and can help you build your credit.

Additional bad credit business loan alternatives you can consider are:

Square Capital

If you process payments with Square, you can get a loan up to $100,000 with Square Capital. It’s a good option for your business if you need funding that’s tied to your credit card revenue and don’t want to meet high minimum qualifications. However, there is no place to apply; instead, Square Capital will reach out to you directly.

PayPal Working Capital

Likewise, if you process your customer payments through PayPal, you can leverage that partnership to get funded through PayPal Working Capital. You can borrow up to 5% of your annual PayPal sales at an APR of 15% to 120%. Your approval is based on your PayPal sales and you can get funded as soon as the next business day.

Business Credit Cards

Although many small business credit cards require that you have a good credit score, you can find some poor credit business credit cards. Among them are secured credit cards that enable you to borrow while you build up your credit score to qualify for future financing offers.

Bottom Line

Business owners with poor credit shouldn’t be discouraged if they are rejected for a traditional bank loan because there are many good options worth considering. Depending on what your personal and business situation is, you may find any of the options in this article a good fit to get financing quickly.

Our recommended bad credit business loan provider is Fundbox. It offers up to $100,000 of financing without a minimum credit requirement. Your loan eligibility will be based mostly on your recent business history. There’s also no minimum revenue requirement to qualify, and it will typically get you funded in as little as one day.

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