Best Of
Online lenders provide small-business loans for borrowers with bad credit. Rates may be higher than bank loans.
Bad credit small-business loans are available from alternative sources, like online lenders. If your credit isn’t great, getting a loan from a bank or credit union may be difficult.
Borrowers with poor credit are considered riskier, so available loans will likely be more expensive as a result. If you need a bad credit business loan, shop around to get the best terms possible and make sure the payments will be manageable.
Here are loans for borrowers with bad credit — defined by FICO as a score between 300 and 629 — and more information on how to qualify for financing.
Our picks for
600+ personal credit score
Additional options may be available once your credit reaches 600, including term loans with higher borrowing amounts.
15.00 - 78.00%
600
Pros
Cons
Qualifications:
11.00 - 61.90%
600
Pros
Cons
Qualifications:
9.00 - 99.00%
600
Pros
Cons
Qualifications:
Our pick for
Businesses with unpaid customer invoices
Invoice factoring can turn your unpaid customer invoices into immediate cash. Approval typically depends on the strength of your customers — such as whether they pay on time — not your personal credit.
15.00 - 68.00%
530
Pros
Cons
Qualifications:
Lender | Best For | Est. APR | Min. Credit Score | Next Steps |
---|---|---|---|---|
BlueVine - Line of credit | Best for 600+ personal credit score | 15.00 - 78.00% | 600 | See Your Loan Options
with Fundera by Nerdwallet |
OnDeck - Line of credit | Best for 600+ personal credit score | 11.00 - 61.90% | 600 | See Your Loan Options
with Fundera by Nerdwallet |
OnDeck - Online term loan | Best for 600+ personal credit score | 9.00 - 99.00% | 600 | See Your Loan Options
with Fundera by Nerdwallet |
BlueVine - Invoice factoring | Best for businesses with unpaid customer invoices | 15.00 - 68.00% | 530 | See Your Loan Options
with Fundera by Nerdwallet |
It’s possible to get a business loan with bad credit if your company is otherwise in good shape. Lenders have different qualifications, and are likely to consider the following in addition to your credit score:
The reasons behind your low credit score may also influence a lender’s decision. For example, it will likely be harder to get approved if a recent bankruptcy or loan default is what’s dragging your score down.
Banks and credit unions likely won’t approve you if you have bad credit. But these alternative sources may let you get a business loan with a spotty credit history:
If your company is less than a year old with little revenue, it’ll be tough to find a startup business loan — whether your credit is good or bad.
A few lenders offers startup business loans for bad credit, but these options can be expensive. That will also likely be the case for any startup business loans with no credit check or guaranteed approval. Be wary of such promises.
Potential alternative options include business credit cards, which typically provide borrowing amounts up to $50,000. However, approval is based on your personal credit score, and you’ll need a minimum credit score of 630 to qualify for most cards.
If you need to improve your credit score, consider getting a secured personal credit card first.
These cards require a cash security deposit when you open the account. But if you use the card responsibly, you’ll improve your personal credit and get back your deposit.
If none of the loans included here works for you, or if you’d like to compare loan options, NerdWallet has a list of small-business loans that are best for business owners. All of our recommendations are based on the lender’s market scope and track record and on the needs of business owners, as well as rates and other factors, so you can make the right financing decision.
To recap our selections...
Some online lenders accept borrowers with bad personal credit scores (300 to 629 FICO). A lower credit score may result in a pricier loan, so building your credit first may qualify you for cheaper options.
Most lenders require a minimum credit score ranging from 500 to 650 FICO, but some have no minimum requirement. Your annual revenue and time in business may also be considered on your application. Shop around and compare small-business loans to get one that fits your needs.