Best Of
Startup business loans are available if you have bad credit, but shop carefully to keep costs in line.
Online lenders offer startup business loans for bad credit, but they can be expensive. Make sure your new business can handle the potential costs of any debt before taking it on.
To overcome poor credit and get funding, startups will need a track record of success — even if it’s only a few months. Reputable lenders won’t offer guaranteed approval.
Here are startup business loans for bad credit (a FICO score below 630), as well as alternatives if you can’t qualify for a small-business loan until your company grows more.
Our pick for
New businesses with unpaid invoices
If you have a B2B startup with bad credit, you can turn unpaid invoices from customers into working capital with invoice factoring from BlueVine. At least three months in business is required to qualify.
15.00 - 68.00%
530
Pros
Cons
Qualifications:
Our pick for
Startups with at least six months in business
Fundbox offers business lines of credit if your personal credit score is at least 600. You must also have two months of activity in Fundbox-supported accounting software or three months of transactions in a business bank account to qualify.
10.10 - 79.80%
600
Pros
Cons
Qualifications:
Lender | Best For | Est. APR | Min. Credit Score | Next Steps |
---|---|---|---|---|
BlueVine - Invoice factoring | Best for New businesses with unpaid invoices | 15.00 - 68.00% | 530 | See Your Loan Options
with Fundera by Nerdwallet |
Fundbox - Line of credit | Best for Startups with at least six months in business | 10.10 - 79.80% | 600 | See Your Loan Options
on Fundbox's secure website |
Be wary of any lender that advertises guaranteed approval or startup loans with no credit check. At best, those may be expensive products. At worst, they could signal predatory lenders that will potentially hurt your new company more than help it.
» MORE: What is predatory lending?
Improving your credit can unlock additional financing options like SBA loans as your company grows. Ways to build credit include paying down debt and fixing mistakes in your credit report. Startups can also look to build business credit through actions like updating business information and uploading financial statements to business credit bureaus.
To recap our selections...
If you have bad credit, you may be able to get a startup business loan from an online lender. Borrowers in underserved communities may also qualify for funding from a Community Development Financial Institution or microlender. Watch out for any lender that advertises “guaranteed approval” for bad credit borrowers; it may be a predatory product.
You likely won’t need to put up physical collateral (like real estate) to qualify for a startup business loan from an online lender that works with bad credit borrowers. But online lenders may file a blanket lien against your business or require a personal guarantee. That means your business or personal assets could still be at risk if the loan is not repaid.