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Compare these small business loans for bad credit to find the right startup loan for you. Most of these lenders will accept scores below 600.
Jason has been writing about small business software platforms, services, and financing since 2015. Jason’s expertise has been featured in Yahoo Finance, Time/NextAdvisor, Home Business Magazine, CreditCards.com, GoBankingRates, TheLadders.com, and other publications. He has a bachelor’s degree in Political Science from San Diego State University.
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Jason VissersJason has been writing about small business software platforms, services, and financing since 2015. Jason’s expertise has been featured in Yahoo Finance, Time/NextAdvisor, Home Business Magazine, CreditCards.com, GoBankingRates, TheLadders.com, and other publications. He has a bachelor’s degree in Political Science from San Diego State University.
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Erica has been writing about small business finance and technology since 2008. She joined Merchant Maverick in 2018 and specializes in researching and reviewing business software, financial products, and other topics to help small businesses manage and grow their operations. Her expertise has been cited in MSN, Reader's Digest, Vox, U.S. News & World Report, and Real Simple. She is a Certified ProAdvisor for QuickBooks Online and QuickBooks Payroll, a graduate of Limestone University, and currently resides in Greenville, South Carolina.
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Erica SeppalaErica has been writing about small business finance and technology since 2008. She joined Merchant Maverick in 2018 and specializes in researching and reviewing business software, financial products, and other topics to help small businesses manage and grow their operations. Her expertise has been cited in MSN, Reader's Digest, Vox, U.S. News & World Report, and Real Simple. She is a Certified ProAdvisor for QuickBooks Online and QuickBooks Payroll, a graduate of Limestone University, and currently resides in Greenville, South Carolina.
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While having a bad credit score can make getting a loan difficult, you can still find ways to finance your new venture. You can even find small business loans for startups that aren’t yet earning revenue.
To help you find funding, we’ve put together this list of the best business loans for startups with bad credit. We’ll also explain what constitutes bad credit and what business lenders will look for in your application.
Later, after you use your loan proceeds to build up your new business and improve your credit score, you’ll be ready to look into the best small business loans more generally.
If you’re seeking easy approval startup business loans with bad credit, the following list of funding options is for you. These options include crowdfunding, equipment financing, short-term loans, and lines of credit that can be accessed by small business owners with bad credit or no revenue.
Lendio: Best Equipment Financing Loans For Startups With Bad Credit
BusinessLoans.com: Best Bad Credit Startup Loans With Borrower Support
Compare offers from multiple lenders with a single application
Long-term funding available
Cons
Not all lenders in Lendio’s network accept bad-credit applicants
Rates can be expensive
Why We Chose Lendio For Best Equipment Financing
Lendio is an easy-to-use online loan matchmaking service that lets you compare and apply to 75+ lenders in just 15 minutes and get funded as soon as 24 hours. Lendio is especially helpful if you’re new to business financing and aren’t sure which options you might qualify for or would work for your business.
Lendio is particularly great for equipment financing, as the service makes it easy to apply to multiple equipment financing companies, including companies that accept businesses that have bad credit and have only been in operation for a few months. Lendio states that if you have bad credit but can show solid revenues for the past 3 to 6 months, you can qualify for equipment financing.
Lendio Services
Lendio is a loan marketplace that allows small businesses to access funding options like:
Equipment financing
Term loans
Lines of credit
Short-term loans
Merchant cash advances
Business credit cards
Commercial mortgages
Accounts receivable financing
Lendio Rates & Fees
Rates and fees vary by product and lender. For equipment financing, Lendio states that rates start at 7.5%. You can borrow $5,000 to $5,000,000 with repayment terms of one to 10 years.
Lendio Eligibility Requirements
Lendio’s eligibility requirements vary by product and lender. For equipment financing specifically, Lendio recommends you meet the following requirements:
Personal credit score: 520+
Annual revenue: $50,000+
Choose Lendio If...
You want to apply for equipment financing to purchase business equipment
You want to compare multiple offers from 75+ lenders with a single application
Saves time by sending your application to multiple lenders at once
Great support & guidance for borrowers
Quick & easy application process
Cons
Funds can take a while to disburse
Not all lenders in BusinessLoans.com’s network accept applicants with bad credit
Why We Chose BusinessLoans.com For Best Loans With Borrower Support
BusinessLoans.com is another loan marketplace in which applicants are connected to loan products from within the company’s lender network. BusinessLoans.com is free to use and will send you loan offers without performing a hard pull on your credit. Also, there is no recommended minimum credit score for loan applicants to meet — the company makes an effort to find loan products for would-be borrowers of all credit levels.
BusinessLoans.com may be a new lending marketplace, but it has already garnered praise for its attention to customer service, as it works with borrowers throughout the matching and application process. You can get matched with a loan by the algorithm and never have to talk to anybody, but if you want individualized assistance, BusinessLoans.com representatives are there to help. Considering all this, adding BusinessLoans.com to this article was an easy call.
BusinessLoans.com Services
Lending products offered through BusinessLoans.com include:
Term loans
Short-term loans
Lines of credit
Merchant cash advances
Lending amounts range from $5,000 to $3 million. If you’re approved, the time to funding ranges from 24 hours to one week.
BusinessLoans.com Rates & Fees
As BusinessLoans.com is a loan marketplace, your rates and fees will depend on the lender and loan product you end up receiving.
BusinessLoans.com Eligibility Requirements
Little eligibility information is provided by the company — notably, there is no minimum credit score to meet.
Typically, you’ll need $100,000/year+ in annual income and 6 monthsin business to qualify for a loan, but BusinessLoans.com will attempt to match you with a loan even if you don’t meet these benchmarks.
Choose BusinessLoans.com If...
You want to easily compare loan offers with one application
You want personalized support to find the best loan for your business
No credit check for certain financing products (if you meet other requirements)
Relaxed time-in-business and revenue requirements if your credit is 650+
Lends to businesses in the cannabis industry (with 1+ year in business)
Cons
Rates can be expensive
Potentially high annual revenue requirements
Why We Chose National Business Capital For Best Loans With Flexible Requirements
National Business Capital is an online lending marketplace with 75+ lenders and a business model similar to that of Lendio. Interested borrowers can choose from various types of short- and long-term business funding options. Rates can be on the high side, but the financing is fast and easy to qualify for, even if you’re a startup with bad credit.
An interesting fact: National Business Capital will lend to cannabis-related businesses if they have at least one year in operation and $500K+ in annual revenue. “Green” businesses, take note!
National Business Capital Services
National Business Capital can connect you with lenders that offer funding such as:
Term loans
Business lines of credit
Equipment financing
SBA loans
Revenue-based financing
National Business Capital Rates & Fees
Like Lendio and BusinessLoans.com, National Business Capital is a lending marketplace. Your fees and rates will depend on the loan product you qualify for and ultimately receive.
For many products, National Business Capital offers rates starting at 7% to 8%.
National Business Capital Eligibility Requirements
Startups with bad credit will have the best luck qualifying for a small business loan or equipment financing loan through National Business Capital (its LOCs and SBA loans have higher minimum requirements).
National Business Capital has very low credit qualifications for financing. However, applicants with a score of 650+ may be able to qualify for financing even if they don’t have any time in business or sales revenue.
National Business Capital typically requires the following to qualify for its small business loans:
Time in business: 1 year
Revenue: $120,000/year
Credit score: 580
Choose National Business Capital If...
You want to compare offers from various lenders for products like term loans, lines of credit, and equipment financing
You own a cannabis startup and have difficulties getting a loan elsewhere
No draw fee, prepayment fee, origination fee, or maintenance fees
Cons
Frequent repayments are required
Rates can be expensive
Why We Chose Fundbox For Best Lines Of Credit
Fundbox has a convenient short-term lending product for newer businesses with subprime credit: revolving lines of credit up to $150,000. Though short-term loans may not be a good fit if your credit is completely trashed or your business isn’t earning revenue yet, Fundbox loans are quite accessible to businesses that have 3 months under their belt and are already bringing in some revenue.
You can get a funding decision within three minutes of submitting an application, and funds can arrive in your account as soon as the next business day. While larger and more established businesses will get better terms with another lender, Fundbox’s business lines of credit are available to startup founders with subprime credit. As such, Fundbox’s short-term funding is more accessible than many comparable loan products found elsewhere.
Fundbox Services
Fundbox offers lines of credit up to $150,000.
Fundbox Rates & Fees
Here is what Fundbox discloses regarding its rates and fees.
Term length: 12 or 24 weeks
Borrowing fee: Starts at 4.66%+ (12-week terms) or 8.99%+ (24-week terms)
Draw fee: None
Fundbox Eligibility Requirements
With a minimum credit score of 600 and 3 months minimum time in business, Fundbox is suitable for both startups and subprime-credit borrowers.
Your business does need to be bringing in at least $30,000/year, and very poor credit applicants will not be approved.
Choose Fundbox If...
You want a line of credit to draw from as needed for business expenses
You want an immediate credit decision and funding as quickly as the next business day
No time-in-business or business income requirement
Builds personal credit
Considers applicants with no credit
Cons
The origination fee is taken off the top of the loan
Low borrowing amounts
Why We Chose Upstart For Startups With No Credit History
Personal loans provide a means for your brand-new business to receive startup funds, even if you have no business credentials. One personal loan option for startups is Upstart, a lending platform that partners with banks to provide personal loans to eligible borrowers. Read our guide to using personal loans for business for more details on this common practice.
If you don’t have any credit history, Upstart may be able to find you a loan product for which you can qualify. This convinced us to add Upstart to this list of top easy approval startup loans.
Upstart Services
Upstart provides eligible borrowers with personal loans ranging from $1,000 – $50,000
Upstart Rates & Fees
Here’s what Upstart discloses about its rates and fees:
Term length: 3 or 5 years
Interest rate: Fixed at 7.4% – 35.99%
After you accept an Upstart loan offer, the funds will usually hit your account by the following business day.
Upstart Eligibility Requirements
Upstart does not state a minimum personal credit score required for its personal loans. Notably, Upstart will also consider applicants with no credit.
Upstart’s underwriting model uses education, employment, and many other variables to make a lending decision. That means college graduates and/or individuals with a steady employment history may have an advantage when applying. However, the only personal income requirement is that you make $12,000/year.
Choose Upstart If...
You have no credit history and would like other factors (education, employment, etc.) to be considered for a loan
You don’t meet the revenue or time in business requirements for small business loans
Credibly originates several types of short-term loans, including merchant cash advances and working capital loans up to $600,000, business lines of credit up to $250K, and others. Some of these products are made available through Credibly's network of external funding partners. This company is startup-friendly — though you do need to have been in business for 6 months — and will accept you even if you have very poor credit.
With Credibly, the money comes through fast, and the amounts you can borrow are pretty high considering the relaxed borrower requirements. A minimum credit score of 500 is quite notable, especially as many competing lenders have tightened their credit score requirements in the face of a turbulent economy. Credibly is also transparent about its rates and requirements, listing all the information you need to know on its website.
Credibly Services
Credibly and its network of funding partners offer the following products:
Term loans
Short-term loans
Lines of credit
Merchant cash advances
SBA loans
Equipment financing
Invoice factoring
Credibly Rates & Fees
Credibly’s rates and fees vary depending on the loan product, but here are the details of Credibly’s working capital loans:
Term length: 3-15 months
Factor rate: As low as 1.11
Origination fee: 2.5% (one-time)
With short-term loans of this type, the total cost of borrowing is front-loaded into a fixed fee, which is expressed as a multiplier referred to as the factor rate. Multiply the amount you’re borrowing by the factor rate, and you’ll know the amount you have to pay back (not counting the origination fee).
Here are the details of Credibly’s merchant cash advances:
Average term length: 3-15 months
Factor rate: As low as 1.11
Underwriting fee: 2.5% (one-time)
Admin fee: $50/month
Credibly Eligibility Requirements
Credibly’s working capital loans and MCAs have a minimum required credit score of just 500, while business lines of credit are offered to applicants with 560+ personal credit.
Credibly’s revenue requirements vary based on the product you select. Your business must be bringing in $15,000/month to qualify for a working capital loan or MCA. You must also have at least 6 months of business history.
Choose Credibly If...
You have a credit score of 500+ and are having difficulty finding a loan elsewhere
You need to borrow up to $600,000 but have a low credit score
You’ll need to conduct a successful crowdfunding campaign
Low borrowing limits
Why We Chose Kiva U.S. For Best Crowdfunding For Startups
Kiva is a nonprofit dedicated to helping small businesses succeed in their communities with interest-free financing. Kiva offers small, crowdfunded loans to entrepreneurs worldwide, but Kiva U.S. is for US-based businesses specifically. According to Kiva, the ideal candidate for its crowdfunded loans is socially aware and has a strong online/social media presence.
Note that these loans are very small, maxing out at $15,000. Additionally, it may take over a month for you to see any funds. However, if your crowdfunding campaign succeeds, you’ll get a completely interest-free loan.
Kiva U.S. Services
Kiva specializes in crowfunded loans up to $15,000.
Kiva U.S. Rates & Fees
Kiva U.S. loans are completely free, with no interest and no fees. However, you must still pay back the loan. Term lengths run from 6 – 36 months.
Kiva U.S. Eligibility Requirements
With Kiva U.S., there is no credit check, and you don’t even need any time in business or business revenues to qualify. Even better, there is no interest or fees charged, and you can repay with a flexible, convenient repayment plan. However, that doesn’t mean that just anyone can easily get a “free” loan.
Kiva favors community-minded businesses with a compelling story — after all, this is debt crowdfunding, so you need to convince individuals browsing the site to lend to your business instead of another business.
Choose Kiva U.S. If...
Your business has a compelling story and strong social media presence
You’re willing to put in the work to run a crowdfunding campaign in exchange for an interest-free loan
Business Loan & Funding Products Review Methodology
We spend hours researching and evaluating each business loan and funding product that we review at Merchant Maverick, placing special emphasis on key characteristics to generate our ratings.
Weighted Rating Breakdown
Rates & Fees 20%
Services 20%
Eligibility Requirements 20%
Application 15%
Sales & Advertising Transparency 10%
Customer Service 10%
User Reviews 5%
When rating lenders and funding providers, we use a 31-point rubric that looks at rates and fees, services, eligibility requirements, application, sales and advertising transparency, customer service, and user reviews. We weigh each section differently to calculate the total star rating. This rubric is applied to traditional term loans, as well as short-term loans, start-up loans, lines of credit, online lending products, merchant cash advances, and equipment financing products.
Rates & Fees: 20% of the total star rating
Services: 20% of the total star rating
Eligibility Requirements: 20% of the total star rating
Application: 15% of the total star rating
Sales & Advertising Transparency: 10% of the total star rating
Customer Support: 5% of the total star rating
User Reviews: 5% of the total star rating
Each section is further broken down into granular, weighted subsections, in which we examine specific attributes like terms lengths, conditions of repayment, credit score and revenue requirements, ease of application, length of time to funding, the ethics involved in promoting the lending product, customer support, and the overall reputation of the lender or funding provider.
So, how do you define a bad credit score, anyway? Personal FICO credit scores under 670 are considered subprime. Having a subprime credit score tells lenders that the borrower may have difficulty repaying a loan. However, there are two categories of subprime credit: bad/very poor credit and fair credit.
Credit scores below 580 are considered “bad” or very poor, based on the FICO credit scoring system. Scores between 580 and 669 are considered fair, but still subprime.
Though credit scores can go as low as 300, even “bad credit startup business loans” tend not to accept applicants with scores below 500 — many of these lenders require a minimum score of 580 or 600.
Alternative Startup Funding For Bad Credit Borrowers
If you don’t qualify for small business loans, alternative funding types have more flexible credit score requirements. Consider the following alternatives to startup business loans for bad credit:
Small Business Credit Cards
If you aren’t yet ready for a business loan, a small business credit card for bad credit can be a good way to cover startup expenses while building your credit. Business credit cards are also an effective way to establish a business credit history and separate your personal credit history from your business credit history.
If you can’t get a business credit card, you can even use a personal credit card to cover business expenses. Just be sure not to use the same card to cover personal and business expenses — the IRS will not look kindly on you if you do so.
Corporate Cards
For new businesses registered as corporations, a corporate card is another type of business credit card that can be used to pay for business expenses. Since you are applying as a corporation, the card issuer will not check your personal credit. The caveat is that many corporate card issuers require a high balance in your corporate bank account. For example, Amex’s corporate card program for startups requires a minimum $1 million bank account balance.
On the other hand, fintech outfit Brex offers a corporate credit card without any cash-on-hand or credit score requirements. However, you’ll have to either take in $1 million/year in annual revenue, have 50+ employees, or have received equity investment to qualify.
Small Business Grants
Business grants do not need to be repaid, and no credit check is involved. Various organizations, local governments, and private companies offer small business grants, including startup business grants. However, your company will usually need to meet certain criteria to qualify. For example, some grants require that your business be woman-owned or be operating in a specific city and/or industry.
Crowdfunding
In addition to crowdfunded loans, such as Kiva, other crowdfunding platforms for businesses do not require any repayment (or credit check). Depending on how the service is structured, businesses may need to offer equity in their company or provide backers with a reward related to the project for which they are soliciting funds.
Bad Credit Startup Business Loan Application Tips
With a few exceptions, the application process for these startup loans is quick, painless, and entirely online. However, startup business loans for borrowers with bad credit are never guaranteed. To increase your chances of startup business loan approval, here are a few tips for applying:
Don’t waste your time applying for startup loans when you don’t meet the minimum qualifications
When you do qualify, apply for multiple loans and then compare your offers to choose the best one (there’s no credit risk in getting pre-approved, as this usually only requires a “soft” credit check)
If you check out some loan or credit card options and are not pleased with the offers you’re getting, you might consider:
Jason has been writing about small business software platforms, services, and financing since 2015. Jason’s expertise has been featured in Yahoo Finance, Time/NextAdvisor, Home Business Magazine, CreditCards.com, GoBankingRates, TheLadders.com, and other publications. He has a bachelor’s degree in Political Science from San Diego State University.
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The vendors that appear on this list were chosen by subject matter experts on the basis of product quality, wide usage and availability, and positive reputation.
Merchant Maverick’s ratings are editorial in nature, and are not aggregated from user reviews. Each staff reviewer at Merchant Maverick is a subject matter expert with experience researching, testing, and evaluating small business software and services. The rating of this company or service is based on the author’s expert opinion and analysis of the product, and assessed and seconded by another subject matter expert on staff before publication. Merchant Maverick’s ratings are not influenced by affiliate partnerships.
Our unbiased reviews and content are supported in part by affiliate partnerships, and we adhere to strict guidelines to preserve editorial integrity. The editorial content on this page is not provided by any of the companies mentioned and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author’s alone.
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