If you have bad credit (under 600) and can’t get a bank loan, there are alternative options. Below, we review and compare OnDeck, Fundbox, and RapidAdvance as the three best options for bad credit business loans.
Best Bad Credit Business Loans
| Credit Score | Loan Amounts | Avg. APR | ||
|---|---|---|---|---|
| 500 | $5K - $500K | 30-50% | ||
| No Min. | $500 - $100K | 38-54% | ||
| 500 | $5K - $500K | 50-80% |
OnDeck
Fundbox
RapidAdvance*Last Updated: October, 2017
Best Bad Credit Business Loans Provider 2017: OnDeck
If you need a business loan quickly but have a low personal credit score or poor credit history, we recommend OnDeck. They care less about your personal credit score and more about your business’s recent revenues. They’ll lend up to $500K with terms as long as 3 years. They offer both term loans and lines of credit. Plus, their minimum credit score requirement is 500.
The table below shows the comparison of minimum qualifications and general terms for the 3 best bad credit business loans provided by OnDeck, Fundbox, and RapidAdvance .
Best Bad Credit Business Loans 2017
| Minimum Credit Score Learn More | 500 | None | 500 |
| Minimum Revenue Required Learn More | $100,000+ | No minimum. Must invoices clients. | $2,500 in Monthly Credit / Debit Card Sales |
| Time in Business Learn More | 1+ Year | 6+ Months | 3+ Months |
| Initial Approval Speed Learn More | 10 Minutes | 2-3 Hours | 2 Business Days |
| Funding Speed Learn More | As quick as 1 business day | 1-3 Business Days | 3-5 Business Days |
| Loan Amounts Learn More | $5,000 - $500,000 Typically 10-15% of your annual revenues | $500 - $100,000 | $5,000 - $500,000 Typically up to 85-250% of your monthly credit/debit card sales volume |
| Loan Term Learn More | 3 Months - 3 Years | 12 Weeks | Until paid back |
| Repayment Cycle Learn More | Daily or Weekly | Weekly | Daily |
| Approximate APR Learn More | 30-50% | 38-54% | 50-80% |
| Personal Guarantee Learn More | Yes | No | Yes |
| Collateral Required Learn More | No | No | No |
| Liens Learn More | Yes | No | No |
Why We Recommend OnDeck For Businesses With Bad Credit
OnDeck is a provider of short term business loans and business lines of credit that can get you funded in about 1 business day. They’re less focused on your personal credit score and more focused on your business’s recent revenues.
OnDeck loans have repayment terms that range from 3-36 months and their flexible line of credit comes with a 6 month repayment term. They may be the best option for business owners who need large loans (up to $500K) but have poor credit (minimum 500).
Also, OnDeck customers report being very happy with their overall customer service. These combined reasons are why we recommend OnDeck as the best provider of short term business loans.
When to Try FundBox: Business Line of Credit for Invoices & Receivables
Fundbox offers short term loans based on the unpaid invoices owed by your business or government customers (B2B & B2G). They’re more worried about your customers’ ability to pay you than your credit score.
Fundbox loans have repayment terms of 12 weeks and payments are made weekly. You can borrow up to $100,000 based on the value of your unpaid invoices. Plus, Fundbox can typically have you funded in 1-3 business days.
Fundbox can be a good option if you invoice government or business customers and you do not meet the credit requirements of traditional loan providers. Fundbox is our recommend invoice financing option for those borrowing less than $25,000.
When to Try RapidAdvance: Credit/Debit Card Receivables
RapidAdvance provides small business financing that’s based on your business’s credit and debit card sales. That sales volume is their largest concern when deciding to approve you. This type of financing is often called a merchant cash advance.
With RapidAdvance you can borrow up to $500,000. They can typically get you funded in 3-5 days if you meet the minimum requirements of a 500+ credit score, 3 months of business experience, and at least $2,500 in monthly credit/debit card sales.
A merchant cash advance is an expensive type of small business financing, however the daily repayments go up and down based on what your credit/debit card sales are. We recommend RapidAdvance as the best merchant cash advance provider.
More Bad Credit Business Loans Options
We couldn’t cover every loan option available for those with poor credit in great detail. If the 3 providers covered here aren’t exactly what you need, the table below covers some alternatives that might be a better fit.
Alternative Bad Credit Business Loans
Minimum Requirements | Loan Terms | Who it is Right For |
|
|---|---|---|---|
Credit Score: 550 Revenue: $50,000 per year Time in Business: 1 Year | Loan Amounts: $2,000 - $150,000 Time to Funding: 1-3 Days Payback Period: 1-12 Months | ||
Credit Score: No Minimum Revenue: $10,000 per month Time in Business: 6 Months | Loan Amounts: Up to $250,000 Time to Funding: As quick as 2 days Payback Period: 6-17 Months | ||
Credit Score: No Minimum Revenue: $10k per year in revenue or $5,000 per month in credit/debit card sales Time in Business: 3+ Months | Loan Amounts: Up to $500,000 Time to Funding: As quick as 3 days Payback Period: 18 Months | Businesses that have credit/debit card sales and need short term working capital. Visit Fora Financial |
|
Alternatives for Inventory Financing |
|||
Credit Score: No Minimum Revenue: No Minimum Time in Business: 1 successful product run | Loan Amounts: 25% of revenue Time to Funding: 1 Month Payback Period: 6 Months | ||
Credit Score: N/A Revenue: N/A Time in Business: N/A | Loan Amounts: $300 - $50,000 Time to Funding: 1-3 Days Payback Period: 1-6 Months | ||
Alternatives for B2B & B2G Invoicing |
|||
Credit Score: No Minimum Revenue: Selling $2K+ in revenue per month Time in Business: Active Amazon seller for 90+ days | Advance Amounts: Daily Amazon sales volume Time to Funding: 1 Day Payback Period: N/A; This is an advance on your own revenue. They do charge 2% for the service. | Fulfillment by Amazon sellers who would like to get their revenue ASAP, rather than waiting up to two weeks. Visit Payability |
|
Credit Score: N/A Good Business Credit Score Revenue: None Time in Business: None | AR Advance: 90% Advance Balance minus fees 30 days after invoice is due. Time to Funding: 5 Days Fees: Until invoice is due | Businesses looking for an AR payment solution. Like credit card processing for your B2B and B2G invoices. Visit NOWaccount |
|
Credit Score: 530 Revenue: None, but must invoice B2B or Government customers Time in Business: Startups can qualify | Loan Amounts: $5,000 - $500,000 Time to Funding: 1-3 Business days Payback Period: Until invoice is due | Business owners who do a lot of B2B or B2G invoicing looking for a short term cash flow solution. Visit BlueVine |
|
Alternatives for Specific POS Systems & Merchant Services |
|||
Credit Score: No Minimum Revenue: $20,000 per year processed via PayPal Time in Business: 3+ Months as a PayPal merchant | Loan Amounts: $1,000 - $85,000; Up to 18% of annual PayPal sales Time to Funding: 1-3 Business days Payback Period: Not fixed, but typically is 1-18 months | Businesses who who need a short term working capital loan and use PayPal to process payments. Visit PayPal |
|
Credit Score: No Minimum Revenue: $10,000 per year processed through Square Time in Business: No minimum | Loan Amounts: $1,000 - $100,000 Time to Funding: A few days Payback Period: Up to 18 months | Businesses who who need a short term working capital loan and use Square to process payments. Visit Square |
|
Two other options are secured business credit cards if you have extra cash on hand and want to build your credit, and hard money lenders if you have real estate with equity to tap. You may also be interested in reading about how to improve your credit score or see our recommended credit repair companies.
Now let’s dive into a detailed comparison of our 3 recommended loan providers.
Minimum Qualification Requirements
Before applying for a loan, ensure that you meet the lender’s minimum qualification criteria. If you haven’t checked your credit score recently, now’s the time to do it. You can check your credit score for free here.
Fundbox doesn’t have a required minimum credit score but you do need to be currently invoicing B2B or government customers. OnDeck and RapidAdvance require credit scores of at least 500.
Time for Approval & Funding
The best way to apply for each of these bad credit business loans is to submit an online application. Fortunately, all 3 lenders take just minutes to pre-approve you for a loan, and they can get you funded within 5 days. If getting a loan fast is your main priority, check out our guide to the Fastest Business Loans.
How Much Can You Borrow?
Most loan providers in this article will lend you money based on your business’ revenues. For example, a business that makes $200,000 in annual revenues will be able to borrow more than a business that makes just $20,000 annually.
For How Long Can You Borrow?
If your business is struggling financially, the amount of time that you borrow for is important. You can lower your monthly payments by borrowing for a longer period of time. However, be aware that the longer you borrow for, the higher the overall cost of the loan will be.
Loan Costs: APR and Fees
Perhaps the most important consideration when borrowing money is the cost of the loan. Make sure that you’re not borrowing more than you can afford to pay back, and be aware of all fees and interest before you agree to the loan.
To compare loan costs, we have calculated the APR (annual percentage rate) for each lender. APR takes interest and fees into account and tells you the cost of the loan over the course of one year.
Personal Guarantee and Collateral
Though every business owner hopes to be able to pay off a loan on time, unexpected things can happen sometimes. Banks typically require collateral as security for a loan in case you can’t pay it back. None of the lenders reviewed here require specific collateral. However, OnDeck does place a lien on general business assets, so your business assets can be seized if you default on the loan.
If you personally guaranteed a loan, your personal assets (e.g. your home, car, or retirement accounts) can be taken from you if you default.If you’re not prepared to pledge your business and personal assets, we recommend choosing an unsecured loan.
Customer Service
Customer service may not be a top concern if your funding options are limited. However, you’ll need to work directly with your lender throughout the term of the loan and poor customer service can create frustrations and headaches. Fortunately, each of our recommended lenders has made customer service a priority.
Bottom Line
Business owners with poor credit shouldn’t be discouraged if they are rejected for a traditional bank loan. There a number of good small business financing options worth considering. For example, Fundbox is a good choice for those businesses with processing B2B or B2G invoices. And businesses processing significant debit/credit card sales can try a merchant cash advance from RapidAdvance .
OnDeck is our recommended provider for bad credit business loans. If you have a credit score of at least 500, you can get funded as quick as 1 business day. They can pre-approve you online in just a few minutes, so visit them today to see how much you qualify for.
Best Bad Credit Business Loans |
|||
|---|---|---|---|
Credit Score | Loan Amounts | Time to Funding |
|
| Ondeck | 500 | $5,000 - $500,000 | 1-3 Days |
| FundBox | None | $500 - $100,000 | 1-3 Days |
| RapidAdvance | 500 | $5,000 - $500,000 | 3-5 Days |
Bad Credit Alternatives for Working Capital |
|||
Credit Score | Loan Amounts | Time to Funding |
|
| Kabbage | 550 | $2,000 - $150,000 | 1-3 Days |
| Credibly | N/A | Up to $250,000 | As quick as 2 days |
| Fora Financial | N/A | Up to $500,000 | As quick as 3 days |
Alternative Loans For Inventory and PO Financing |
|||
Credit Score | Loan Amounts | Time to Funding |
|
| Kickfurther | Not Checked | 25% of revenue | 1 Month |
| Behalf | No Minimum | $300 - $50,000 | 1-3 Days |
Alternative Loans For B2B & B2G Financing |
|||
Credit Score | Loan Amounts | Time to Funding |
|
| NOWaccount | No minimum | 90% Advance of AR | 5 Days |
| BlueVine | 530 | $5,000 - $500,000 | 1-3 Days |
Alternatives for Specific POS Systems & Merchant Services |
|||
Credit Score | Loan Amounts | Time to Funding |
|
| PayPal Working Capital | No Minimum | $1,000 - $85,000; Up to 18% of annual PayPal sales | 1-3 Days |
| Square Capital | No Minimum | $1,000 - $100,000 | A few days |
Sherry Wallace
Hi My name is Sherry Wallace and I am trying to get start up funds for my business. My credit score is over 600 but under 650. The only problem That I have are 3 or 4 companies that are in collections due to a divorce and 2 deaths in my family that I had to take care of. The accounts are over 1 or 2 years old. One of the accounts are over 6 months old but they did the charge off Aug 2016. It’s hard to find anyone to approve you with start up funds. Can you give me some in site on what I need to do and if Behalf can help me.
Hi Sherry,
Lenders of all kind will be very hesitant to lend money if there are accounts outstanding that are in collections, but here are a couple options:
1: Inventory financing: if you have a track reccord selling a product and the product is non perishable, then consider getting funding from Kickfurther.
2: Invoice factoring: if you are B2B or B2G and invoice your clients, invoice factoring with a company like Fundbox can get you an advance on outstanding invoices.
3. Short term alternative loans: a lender like Kabbage may be able to work with you.
You may want to consider working with a credit repair company like My Credit Group. Read our full buyers guide here to see why we think they are the best. Until your credit is cleaned up, any borrowing you do will be very expensive.
Regards,
Ian