|Financially Reviewed by Somer G. Anderson|
|At a glance — Today, it is possible to get a loan even with bad credit and a poor FICO score. On this page, our experts will recommend top business loans you can apply for even if you have bad credit. We will also walk you through the process of selecting a loan based on your credit score and business needs.|
Why Your Credit Score Matters
You may be applying for funding to support your business, yet most lenders will still take your personal credit score into consideration. Your FICO credit score is based on several factors, called the 5 C’s of credit: character, capacity, capital, conditions, and collateral. Lenders use these factors to see, for example, how many payments you have met on time, if you repay your debts, and your debt-to-income ratio. FICO is the most common model used to determine creditworthiness.
The FICO model credit score ranges for are:
- Exceptional (800 - 850)
- Very good (740 - 799)
- Good (670 - 739)
- Fair (580 - 669)
- Poor (300 - 579)
“Bad credit” is typically used in reference to a FICO score of 300-629. Traditional lenders generally reject entrepreneurs with a poor FICO score. Yet, if you have a score that is in the lower range, you still can secure a bad credit business loan. Some alternative lenders concentrate on the future of your business rather than what has determined your poor credit score in past years.
A Comparison Table Of The Best Business Loans For Bad Credit
There are many different types of small business loans for people with bad credit. Each type of loan has its own advantages. Here is a summary table of the best business loans for bad credit available in 2021.
Minimum Credit Score
Minimum Time In Business
Up to $5,000,000
Up to $15,000
0% (Repayment period is three years)
Working capital loans
Up to $400,000 (But varies on credit)
Factor rate as low as 1.15%
Line of credit
3 months of invoicing
4.66% for a 12-week term,
8.99% for 24-week term
Start at 35% annually
Our Recommendations -What Small Business Loans Can You Get With Bad Credit?
The bottom line. Here are our recommendations for the top small business loan types for businesses with bad credit.
- BlueVine - Invoice factoring: This is one of the top options for people with bad credit because it offers the most amount of money, up to $5,000,000 - for people with a credit score of 530 and up. Unlike other types of small business loans, invoice factoring is for companies with established business records only.
- Kiva: There’s no doubt that Kiva’s loans rank amongst the top. At an interest rate of 0%, and a pay-back-as-you-go repayment period, a small business with Kiva crowdfunding has greater control than a small business with loans anywhere else. Kiva also makes business loans for veterans with bad credit more accessible.
- Credibly - Working capital loan: This type of loan has the lowest acceptable credit score at 500. Working capital loans through Credibly can also go up to $400,000.