Business Loans for Bad Credit

Find the Lowest Interest Rates for Business Loans With Bad Credit
Small Business Customers
375 Million+
in Funded Capital
Rating from the BBB
60 Google Reviews

How Do I Get a Small Business Loan With Bad Credit?

If your poor credit history is holding you back from getting financed by traditional lenders, we’re here to be the bearers of good news—it doesn’t have to. Luckily, there exists a wide range of special business loans you can take advantage of today. As the financial sector has spilled into the online world, the playing field has opened up for loans to become more readily available to those who were previously not eligible for them due to credit issues. No doubt it’s easier with great credit, but there are options to get a small business loan with poor credit. At AdvancePoint Capital, acquiring a small business loan with bad credit, no matter what level your personal FICO credit score is possible. By working with AdvancePoint Capital, you can enjoy the benefits of alternative lenders and business loans with bad credit.

Banks and credit unions do not typically provide business loans for small business owners with bad credit because they have to protect their depositors when offering bank loans. That’s where AdvancePoint Capital comes in to play for a small business with bad credit. We understand that running small businesses takes great initiative, courage, and support. You may need money for working capital, renovations, expansions — the list goes on. If one of those key elements is missing from your business, the structure can quickly fall apart. Having the opportunity to access capital through business loans for your business while struggling with bad credit may be the very thing you need to catapult your company into the next income bracket. So, let’s dive into business loans for bad credit so you can be better prepared.

Apply For Your AdvancePoint Loan Today!

What Defines a Bad Credit Business Loan?

When your credit is calculated by a credit bureau, a FICO score is created on your credit report based on a preset algorithm. These credit scores range from 300 to 850, and your approval rates for business loans and the interest rates you are given are based on your individual score. Personal credit is about more than just a FICO Score. Business lenders look at FICO scores and have developed specific risk models, which look at what type of tradelines you have, including revolving credit like credit cards, installment loans like mortgages, car loans, and other forms of credit. The number of trade lines of credit you have, payment history length of your trade lines, and credit availability will play a role in the credit decision or a business loan with bad credit. These type of loans offer solutions for those struggling with poor credit history.

Your Personal Credit Score Can Impact Getting a Business Loan

Both traditional lenders and alternative business lenders look not only at the business credit scores of the business but also the personal credit report of the small business owner because it is a key indicator of willingness to repay behavior. Whether it’s personal loans or business loans made to small businesses, the data shows lenders that this metric is a key indicator of repayment. The interest rate of the small business loan may also be affected due to that bad credit.

If you’re credit score crazy like we are at AdvancePoint Capital, this is a source of information related to what’s evaluated by credit reporting agencies in your personal credit FICO score.

The bottom line about business loan with bad credit is that although you don’t need a minimum credit score, the better the business owner’s personal credit history, the more business loans and options available from online lenders.

Here’s a breakdown chart of the range of personal credit bureaus available by the credit reporting agencies Experian, Trans Union, and Equifax:

Top 6 Best Financing Options for Bad Credit Business Loans

Let’s look at the best bad credit business loan options available in the marketplace for bad credit borrowers.

1. Short Term Bad Credit Small Business Loans

Short-term business loans cater to bad credit score risk by shortening the time to repay and limiting the loan amount that businesses can acquire. This creates affordable payments while still protecting against the risk of lending for bad credit.

This type of bad credit small business loan comes with a fixed amount of money called a  “lump sum,” provided upfront with a set payback amount over a fixed repayment term of typically 6 to 18 months (this period is defined as a short term small business loan). This cost is called a “factor cost” and is not principal and interest like other business loans.

Unlike traditional small business loans, short term business loans require less documentation with just bank statements and a one-page application process. The good news is short term bad credit small business loans require very little paperwork, and bad credit score requirements are much more forgiving than traditional small business loans.


Short Term Business Loans Product Overview

Rates: from 1.09% up to 1.45%
Terms: 6 to 18 months
Fees: Origination fees that range from 0%-5%
Loan Payments: Monthly, bi-weekly, weekly, and, in some cases, daily Monday-Friday to reduce risk
Personal Credit Score Standards: All credit accepted from bad credit to excellent; No minimum credit score required to get a business loan, but personal guarantee may be required
Time in Business: 6 months or more
Special Features: Fast application process; Funding approval can be same day to 24 hours

Learn More About
Small Business Loans

Get Started

2. Merchant Cash Advances

Merchant cash advances, also known as a purchase of future sales agreement, advance a “lump sum” of money upfront to small business owners with a discounted purchase price (also known as a specified amount) to pay back. The merchant cash advance is repaid by taking a fixed percentage of future credit card sales batches until the payback amount is paid in full. There is no term limit with advances as the fixed back percentage never changes.

The time frame to pay back merchant cash advances depends on the volumes of future credit card sales. This product has no term limit as payments are connected to credit cards and sales, but business underwriters try to predict repayment between 6 to 18 months. While advances are technically not “loans,” they offer funding options for small business owners with a bad credit history. Merchant cash advances are not term business loans.

Merchant Cash Advance Product Overview

Rates: 1.15% up to 1.45%
Terms: No term limits estimated payback periods are 6 to 18 months
Fees: Typically 1% to 3% origination fees
Payments: Fixed percentage splits from future credit card batches
Personal Credit Score Standards: All credit score types considered from bad to excellent credit; No minimum credit score required
Time in Business: 6 months or more
Special Features: Fast application process; No personal guarantee.

Learn More About
Merchant Cash Advances

Get Started

3. Business Cash Advance

Business cash advances, also known as a purchase of future sales agreements, advance a fixed “lump sum” of money with a discounted purchase price, also known as a specified amount, to pay back. The advance is repaid by taking a fixed percentage of future overall sales, which is different than a merchant cash advance, which takes a percentage of future credit card sales. Payments are collected by a fixed daily or weekly payment deducted from a business bank account based on the fixed percentage of future sales. Again, while technically not under the umbrella of “bad credit business loans,” it is a perfectly sound option from alternative lenders to get the financing options for you.

Reconciliation of payments can occur every month if the fixed payments taken are more than the set fixed future percentage of sales in the agreement. A refund to the merchant can arise if an overpayment is made month to month while a payback balance exists. This repayment continues until the payback amount is paid back in full. Therefore, there is no repayment term limit with advances as the fixed payback percentage is attached to sales in the future. This process mitigates credit risk by adjusting the monthly collection of payments, unlike short-term business loans.

The estimated repayment period is associated with credit score risk, and cash advances are expected to be repaid in 6 to 18 months. Again, it may be longer or shorter depending on future credit card sales as the period is not set in stone like a short term loan. Business cash advances are not business loans.


Business Cash Advance Product Overview

Rates: 1.10% up to 1.45% factor rates
Terms: No term limits estimated payback periods are 6 to 18 months
Fees: Typically 1% to 3% origination fees
Payments: Fixed ACH payments are weekly or daily Monday-Friday
Personal Credit Score Standards: All FICO credit score types, from bad credit to excellent profiles considered
Estimated Annual Gross Sales: Greater than $250,000
Time in Business: 6 months or more
Special Features: Fast application process; No personal guarantee

Learn More About
Business Cash Advance

Learn More

4. Invoice Financing (Accounts Receivable Financing)

Invoice financing, also known as “invoice factoring” or “accounts receivable financing,” is a type of financing that allows small businesses to get cash quickly from unpaid customer invoices that would otherwise remain unpaid for up to 90 days or more, depending on invoice terms.

This type of small business financing allows you to get an advance of up to 95% percent of purchase orders or unpaid customer invoices from your customers. An invoice factoring company will advance a set amount of the unpaid invoice to the business owner and then collect directly from the client or customer for the unpaid customer invoices portion. This is an excellent option to improve cash flow.

The business owner’s credit score is not evaluated. Therefore, bad credit is not an issue. The credit score approval is directed to the customer/client, so there is little documentation required other than an application, accounts receivable report, and contact information of the companies you invoice regularly. This is an excellent product for those struggling with poor credit.

Invoice factoring mitigates credit risk by collecting unpaid customer invoices directly from the client/customers instead of allowing the owner to pay them back. Invoice factors also look at the client/customer credit risk factors when approving invoice advances. Creditors will not extend an invoice advance beyond typical invoice terms of 30, 60, or 90 days, limiting exposure to clients not paying unpaid customer invoices and causing a financial loss for the invoice financing company. Invoice financing companies monitor outstanding daily invoices and work closely with customers and clients to detect potential credit risk problems.


Invoice Factoring Overview

Fees: Typically 1% to 1.75% of the invoice amount; Additional fees for delayed payments
Personal Credit Score Standards: Companies that are invoiced will be credit vetted, but business owners issuing invoices credit profile are not evaluated; No minimum credit score, but personal guarantee required

Learn More About
Invoice Financing

Learn More

5. Business Line of Credit for Bad Credit

A business line of credit is a revolving credit option that allows company owners to draw on-demand funds or make purchases up to a specific limit. A line of credit is not a term loan. Business lines of credit are not open-ended forever and require renewal either semi-annually or annually to be extended.

Of all the funding products we’re discussing, lines of credit will be the most difficult to get approved for as it does entertain fair to subprime credit but does not go as deep into lower credit as other options mentioned. So, if you’re considering a line of credit for your small business, it’s essential to know if you’re eligible because lenders are far harsher in their requirements related to the line of credit.

Business lines of credit offer incredible opportunities, but the requirements can be stringent. It’s a highly flexible option for small business owners, which can significantly benefit your businesses. If you’re looking for flexibility and improved cash flow, a business line of credit is a great choice. However, it’s not a great option for large loan amounts, as the limit will be restricted, and approval is more difficult to achieve. Lines of credit are great for cash flow needs!


Line of Credit Product Overview

Rates: Factor costs 1.09% up to 1.28%
Terms: Open revolving line of credit, renewed annually semi-annually to annually
Fees: Origination fees range from 0% to 3%
Payments: Monthly, bi-weekly, or weekly payments
Personal Credit Score Standards: All personal credit score profiles considered; Personal guarantee and minimum credit score required.
Estimated Annual Gross Sales: Annual revenue greater than $250,000
Processing Time: Same day to up to a week depending on lenders
Time in Business: No time in business requirement

Learn More About
Line of Credit for Bad Credit

Learn More

6. Business Credit Card for Bad Credit

A credit card with bad credit can be offered to a business owner, but it will have to be secured by money as a deposit against the credit limit. A credit card is a revolving line of credit with a set limit. With a secured credit card, you have to start with a small credit limit ( as little as $300) but can be built up over time into the thousands of dollars with good pay credit history. Credit cards have an easy application process requiring only a one-page application to process. Expect a higher percentage rate than regular credit cards or lines of credit. Minimum credit score may apply. Personal guarantees are required in most cases.

The fast, convenient and straightforward way to get the money you need for your business – now!

Get your quote today by filling out our simple form.

Key Considerations Before Funding Business Loans for Bad Credit

You might be wondering how lenders offset the risks associated with funding loans with bad credit. There are a variety of factors that contribute to your eligibility to get business loans with bad personal credit or less than perfect credit.

Personal credit scores play a vital role in the credit decision process. The track record of managing personal credit obligations correlates to how business owners will handle credit directly, especially with their small businesses. Having less than stellar credit, or worse, bad credit, in your personal life will be a big factor. Along with a bad personal credit score, the business credit score is also evaluated for payment histories with vendors, liens, judgments, and State or Federal tax obligations that may interfere with the lenders’ ability to collect. We always recommend you make an effort to improve your bad credit.

The type of industry definitely plays a role in the credit decision. No two industries are created equal, and they have their unique ways of operating. Some industries are inherently more risky than others. Credit underwriters can determine high-risk sectors through data collection and analysis of delinquency and defaults and set programs and terms that mitigate that risk against loans for bad credit.

Many business loans and other lending products that consider a low credit score do not look at financial statements to render a decision. Still, if the financial statements are positive, it may be worth providing them to help compensate for bad credit concerns when acquiring business loans. Financial trends are used to evaluate creditworthiness. Tax returns, recent profit & loss, and balance sheet accounts receivable and payable reports can tell a complete picture that allows lending underwriters to assess risk against bad credit score borrowers.

Existing debts are evaluated as part of the loan underwriting decision. If debt consolidation can occur, it can help mitigate bad credit impacts on approval. A potential borrower may accept your application for business loans even with a poor credit score because this puts businesses in better financial standing from a monthly payment (debt) perspective.

Annual Revenue

Just because businesses have revenue coming in as discussed, annual revenue does not tell the whole story. If expenses are greater than deposits, it’s going to be hard for a small business to survive, no matter if it’s a million dollars or $15,000 in deposits, the expenses out the way that there’s going to be problems, that’s just common sense. The good news is that although profit and annual revenue are evaluated, there are funding products that can still fund small businesses that temporarily aren’t showing a profit in their yearly revenue breakdown. Lenders mitigate this risk by shortening the repayment term and increasing the costs of business loans with less than stellar credit.

As the old saying goes, cash flow is king in business lending (well, it’s close). Business Bank statements are the first place business lenders look to gauge how you manage cash flow and any stresses in annual revenue versus expenses in the company. Underwriters look at the consistency of deposits from sales, the number of deposits, average daily balances, available cash reserves compared to monthly expenses (debits). Better the cash flow, the greater the compensating factor against bad credit.

What Are the Pros and Cons of Business Loans for Bad Credit?


  • Access to Working Capital – Instead of being declined by traditional “best business loans,” funding can be achieved with alternative lenders for working capital or other needs. Look for higher loan approval rates for less than stellar credit.
  • Credit – No minimum credit score
  • Fast Processing Times – Loans are processed and funded the same day (sometimes).
  • Reduced Documentation – Compared to traditional business loans, these loan options require less documentation than other business loans, eliminating potential declines.
  • Personal guarantees are not required for some products.


  • Interest rates will be higher than that of traditional business loans
  • Fees may cost more than conventional business loans (but not always the case)
  • Terms will be shorter in the duration of time to repay
  • May not offer the same flexibility as other business loans can
  • Business loan amounts and access to the amount of capital may be reduced


Most Common Reasons to Acquire a Bad Credit Business Loan

  • Emergency Business Loans
  • Working Capital Business Loans
  • Cash Flow Shortages
  • Business Expansion Loans
  • Advertising, Marketing, and Customer Acquisition
  • Equipment Loans or Leases

How to Avoid Being Taken Advantage of by Business Lenders Because You Have Bad Credit

  1. Evaluate the expertise of business loan originators for product knowledge and experience.
  2. Determine a variety of product offerings. Ask yourself if the business loan originator has a diverse amount of business finance product offerings.
  3. Ask how the application, underwriting, and funding processes work. How quick and efficient is the process?
  4. Check various reviews from independent third-party sources that don’t work directly with companies, like the Better Business Bureau and Google. Trust Pilot is not reliable because they work directly with businesses and are compensated for their reviewing services.
  5. Review agreements, fee disclosures, and term sheets; Always require loan originators to provide any business financing quotes an agreement, fee disclosure, or term sheet with all terms and conditions.
  6. Review and consider all costs or fees associated with the funding transaction.
  7. Consider your offers and quotes, then comparison shop. Any reputable business loan originator will give you a reasonable amount of time (typically a week) to consider any funding offer.

What Types of Lenders Provide Business Loans With Bad Credit?

  • Marketplace Business Loan Providers – These providers have the largest network of business funding options of any entity.
  • Business Loan Brokers – Many brokers specialize in helping those with bad credit scores and have unique funding products to offer with an array of business loan options.
  • Online Business Lenders (Fintech) – Online business lenders, also known as alternative lenders, may help provide business loans for those with bad credit. Still, the limited product lines may not offer the best choice. Always compare offers with other online lenders if choosing this route, as online lenders have varying guidelines.
  • Invoice Factoring Companies – Invoice factoring is a unique option for those who invoice their clients as a part of their operation. The business owner’s credit score is NOT evaluated. The invoiced clients have their credit evaluated because that is where the collection of funds is coming from in invoice factoring. Fees are low for invoice factoring well, providing an attractive alternative for those with a bad credit score.
  • Hard Money/Private Business Lenders – This type of lender can provide unique opportunities because it is common for these lenders to use personal and business collateral as compensating factors to lend business loans.

FAQ: All About Business Loans With Bad Credit

It is not difficult to find business loans and other funding options if the owner has bad credit or less than stellar credit. Keep in mind that banks don’t offer these types of funding products, so bank business loans are not an option. You have to go online to find funding originators who offer these funding products. Some choices, such as a line of credit, will certainly be more challenging to obtain due to minimum credit score requirements, and your business credit history could affect your choices and what a customer pays in rates and fees.

You cannot get business loans if you have less than perfect credit or, worse, bad credit at traditional banks or credit unions. You will have to find alternative business originators who are alternative lenders. AdvancePoint Capital has a variety of financing options for bad credit small business loans.

We never recommend you pay up-front fees, poor credit or not. You do not need to pay upfront fees to get most business loans and other financing products, regardless of your credit history. Keep in mind that funders or lenders will charge fees deducted from proceeds at the time of funding. Ensure you always check the terms and conditions of all business loans or any funding options you consider, regardless of bad credit.

Most funding decisions by lenders will be made by looking at the majority of business owners of the business. Adding additional non-owners as co-signers to bolster the other owner’s bad credit, in most cases, will not improve the chance of getting business loans for your business due to your bad credit.

It is not commonplace to find business loans with poor credit scores below 500, but they do exist, and online lenders like AdvancePoint Capital have them!

There are minimum credit score requirements for different business loan products, but they vary greatly depending on the type of financing products. All credit history types are considered at AdvancePoint Capital, with the exception of no credit at all. Less than perfect credit can limit options, but businesses can get the funding they need even with a low credit profile.

Some products do not require past business credit history; some products do. Check with your business loan originator for funding options with no business credit score. A bad credit business rating can negatively impact offers.

When it comes to SBA loans and bad credit, the answer is typically not likely. SBA-approved lenders are much more fastidious in their requirements and find bad credit too risky for lending.

Like a personal credit card, a business credit card will require a good to excellent personal credit score and only provides business financing if money is put up for security. Business credit cards also are issued by the bank you do business banking with or a specialty bank. Outside banks do not normally offer business credit cards unless they control your business bank operating account. Make sure to check the interest rate as it will be higher than average.

The California financing law license covers some but not all funding structures/options in the state of California. Also, some federal exemptions by certain entities exist as well.

Advice, Tips, and Warnings on Bad Credit Business Loans

Getting business line of credit loans for business owners struggling with their credit score these days is a lot easier than it used to be. There are some exciting new loan options and other small business financing options to access capital for their businesses. These unique product structures provide small business owners access to the capital they may not otherwise get approved for by traditional lenders due to bad credit. Business loans for bad credit are available far and wide if you know where to look for business loans with bad credit. With such a wide range of small business loan opportunities, it can be difficult to find the best business loan options that work for you without help.

However, the business owner still must ask critical questions when getting business loans for your business. Make sure you ask yourself; What is my cost vs. benefit analysis? Should I attempt to improve my bad credit first before choosing business loans for bad credit? Can I make more than it’s going to cost me for this money? What are the long-term benefits of accessing this capital for my business? Are the costs, fees, and terms worth it?

If you ask the tough questions of yourself as a business owner and are comfortable with your answers, these bad credit business loans can be an excellent source to help your business grow!

Get a Small Business Loan With Bad Credit and No Collateral

AdvancePoint Capital offers an effortless experience for obtaining bad credit business loans. Our customers love the fast, streamlined process and high approval rates that come from working with us. Bad credit scores are considered. Our marketplace consists of some of the best business lenders in the industry that specialize in bad credit. Let us help you find the best bad credit business loans.

Applying for a loan with AdvancePoint Capital is as simple as a 1, 2, 3, 4 process. Start with this online form, then fill out the short one-page business loan application, wait a few hours for your approval, and then get your money!

The fast, convenient, and straightforward way to get the bad credit business loans you need for your business – now!

Make sure to Get your quote today by filling out our simple form.