How to Get a Business Loan with Bad Credit

Feb 26, 2019

Have you gone to the bank to get a small business loan, only to hear that your credit score was too low? You're not alone. A 2018 survey of 10,000 business loan applicants revealed an 82 percent rejection rate.     

Why such a high rate of rejection? It's largely because small business loans are costly for banks to process, and they have a high default rate. A 2017 study revealed that one out of every six loans backed by the US Small Business Administration (SBA) goes into default within five years.   

To offset this risk, lenders have to be very picky about which applications they approve. Often, it comes down to the applicant's personal or business credit score. 

Can I Get a Business Loan with Bad Credit? 

Yes, you can. But you'll probably have to do more leg work to find a lender – maybe much more leg work, depending on your score.

What Is a Bad Credit Score?

Your credit score, also known as your FICO score, can be anywhere on a scale of 300 to 850. Anything above 669 is considered to be a good or better score. The higher on the scale you are, the better your rates tend to be. 

If your score is between 580 and 669, you are considered to be a riskier borrower. Once your score dips below 580, your credit is rated as “very poor.” A borrower in this range is considered to be an extremely high risk and will typically have trouble getting credit. 

How to Apply for a Business Loan with Bad Credit – 5 Options 

Rather than try to compete with business owners whose credit is in the good to exceptional range, start by looking for a business loan for someone with bad credit. There are a number of lenders that serve this demographic. 

1. Kabbage

Kabbage has been in business for 10 years and has lent more than $4 billion to small business owners across the world. It provides funding to businesses that are at least one year old. 



  • A monthly fee of up to 10 percent whenever you carry a balance

2. Fundbox

Fundbox received the “best overall” rating from FitSmallBusiness in its report of business loans for borrowers with bad credit. It's minimally restrictive and approves based on a custom assessment of each business. Invoice financing and lines of credit are available to those who qualify.


  • No minimum credit score OR minimum annual revenue (though the likelihood of approval is higher with at least $50,000 in revenue)
  • Approval in less than 3 minutes and funds as soon as the next business day 
  • No application fees 
  • Financial incentives for early repayment


  • Weekly payments are mandatory. This can be tough for businesses without a steady stream of cash flow. 
  • A maximum loan amount of $100,000

3. OnDeck

Founded in 2007, OnDeck offers term loans and lines of credit for businesses that have been in business at least one year. Its annual revenue minimum for borrowers is $100,000. 


  • Minimum credit score of 500 for term loans   
  • Lines of credit up to $500,000 
  • Loan terms up to 36 months   
  • Decisions within minutes and funds as soon as the next day 
  • Payments reported to credit bureaus so on-time payments can boost your score 
  • A+ rating from the BBB


  • An origination fee of 2.4 percent to 4 percent for term loans   
  • Blanket lien placed on all business assets 
  • Daily or weekly payments required

4. LoanBuilder 

From LoanBuilder, business owners can get funding of up to $500,000, provided that they have a minimum annual business revenue of $42,000 and have been in operation for at least 9 months. 


  • Minimum credit score of 550 
  • Weekly payment by automatic deductions 
  • Flexible terms let you schedule repayment in advance 
  • No penalties for early repayment 
  • Fixed fees and no origination fee   
  • Funding as soon as the next business day 


  • No opportunity to view rates until you apply and get approved. 
  • Weekly payments required    
  • Some customers have reported high costs

5. BlueVine

Even though it's only been around since 2013, BlueVine appears on most lists that determine the best place to get a business loan with bad credit.


  • Offers business lines of credit, new debt financing, and invoice factoring 
  • Minimum credit score of 530 for invoice factoring and 600 for a 6-month line of credit 
  • Options for business owners who have poor credit, little to no collateral, and unpaid customer invoices 
  • Invoice factoring of up to $5 million  
  • Average application-to-payout time of 24 hours


  • Maximum limit of 13 weeks for term loans 
  • High introductory APR  

Alternatives for Small Business Funding

If you research how to get a business loan with bad credit, you may find that none of the options are quite right. Don't give up – there are a number of alternatives, including:

  1. Venture capital, a kind of funding specifically for new businesses
  2. Loans or gifts from friends or family
  3. Home equity loans or lines of credit

If you're a homeowner, you may have thought of tapping your equity but dismissed the idea. Maybe you assumed that you'd need to either take out a home loan – more borrowing! – or sell your home and move.

That used to be true, but not anymore. EasyKnock has introduced a unique program known as Sell and Stay, which lets you sell your home and receive all of the equity you've built up. The difference is that you remain in place as a tenant, continuing to pay rent until you decide to move or re-purchase the home.     

The Funding Without the Risk

Through Sell and Stay, you get the capital that you need without the risk that comes with a loan. You can close and receive your equity in 21 days or less and you don't even have to provide your credit score or income information. Visit and learn more today.