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The 7 Best Bad Credit Startup Business Loans

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 Vissers
  • Last updated onUpdated

  • Chelsea Krause
  • REVIEWED BY

    Chelsea Krause

    Lead Staff Writer

Advertiser Disclosure: Our unbiased reviews and content are supported in part by affiliate partnerships, and we adhere to strict guidelines to preserve editorial integrity.

Getting business loans with bad credit may seem almost impossible. However, 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.

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  • Best Equipment Financing Loans For Startups With Bad Credit
  • Minimum Credit Score: N/A
  • Revenue: N/A
  • Best Equipment Financing Loans For Startups With Bad Credit
  • Minimum Credit Score: N/A
  • Revenue: N/A

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  • Best Bad Credit Startup Loans For Borrower Support
  • Minimum Credit Score: N/A
  • Revenue: N/A
  • Best Bad Credit Startup Loans For Borrower Support
  • Minimum Credit Score: N/A
  • Revenue: N/A

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  • Best Startup Loan For Flexible Borrower Requirements
  • Minimum Credit Score: 580+
  • Minimum Revenue: $500K+/year
  • Best Startup Loan For Flexible Borrower Requirements
  • Minimum Credit Score: 580+
  • Minimum Revenue: $500K+/year

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  • Best Short-Term Loans For Startups
  • Minimum Credit Score: 600+
  • Revenue: $100K+/year
  • Best Short-Term Loans For Startups
  • Minimum Credit Score: 600+
  • Revenue: $100K+/year

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  • Best Easy Approval Loans For No Credit
  • Minimum Credit Score: 300+ (those with no credit will still be considered)
  • Revenue: $12K+/year (personal income)
  • Best Easy Approval Loans For No Credit
  • Minimum Credit Score: 300+ (those with no credit will still be considered)
  • Revenue: $12K+/year (personal income)

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  • Best Merchant Cash Advance For Startups
  • Minimum Credit Score: 500
  • Revenue: $15K/month
  • Best Merchant Cash Advance For Startups
  • Minimum Credit Score: 500
  • Revenue: $15K/month

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  • Best Crowdfunding For Startups
  • Minimum Credit Score: N/A
  • Revenue: N/A
  • Best Crowdfunding For Startups
  • Minimum Credit Score: N/A
  • Revenue: N/A

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Table of Contents

Can You Get Easy Approval Startup Business Loans For Bad Credit Guaranteed?

Getting small business startup loans can be very challenging if your credit is so bad — or your business so new — that you don’t qualify for any loans at all. The same goes for new or aspiring business owners seeking first-time business loans with no revenue yet.

Sadly, there is no such thing as a startup loan with guaranteed approval, especially for new businesses that can’t meet minimum qualifications. However, there are still some financing options you can pursue even if you don’t qualify for any new business loans.

What Is Considered A Bad Credit Score?

Type Of Credit Credit Score
Poor 300-579
Fair 580-669
Good 670-739

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.

7 Best Bad Credit Startup Business Loans

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, and can be accessed by small business owners with bad credit or no revenue.

Lendio: Best Equipment Financing Loans For Startups With Bad Credit

Lendio


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Pros

  • Saves time by sending your application to multiple lenders at once
  • Helps you figure out which financing product is best for your needs
  • Lets you compare different loan offers so you can choose the best one

Cons

  • Not all lenders in Lendio’s network accept bad-credit applicants

Why We Chose Lendio For Bad Credit Startup Business Loans

Lendio is an easy-to-use online loan matchmaking service that lets you compare and apply to multiple business loans 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 no longer publishes specific borrower requirements, but it can often find lenders willing to work with poor credit scores, making it an obvious fit for this article. By using this service, you can prequalify for equipment financing, merchant cash advances (MCAs), short-term loans (STLs), lines of credit (LOCs), Small Business Administration (SBA) loans, and more.

Lendio’s network includes more than 75 lenders, including big names such as Amex Business Blueprint (formerly Kabbage), OnDeck, and BlueVine. In the equipment financing space, Lendio connects with Balboa Capital, B2B Leasing, Simmons Bank, and others.

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 3-6 months, you can qualify for equipment financing.

Lendio Rates & Fees

Lendio’s rates and fees vary depending on the lender and loan type you ultimately get matched with.

Lendio Eligibility Requirements

Any business can apply for Lendio, but for the best chance of getting funded, Lendio used to recommend that in addition to a 550+ credit score, you have six months in business and make at least $10K monthly. Lendio no longer lists these guidelines, but it’s likely that they aren’t too far off.

Lendio does state that you’ll need to provide at least three months of business bank statements when you submit your marketplace application.

Get Started With Lendio

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BusinessLoans.com: Best Bad Credit Startup Business Loans For Borrower Support

BusinessLoans.com


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Pros

  • 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 ith bad credit

Why We Chose BusinessLoans.com For Bad Credit Startup Business Loans

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.

Lending products offered through BusinessLoans.com include short- and long-term loans, lines of credit, and 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 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 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+ in annual income and 6+ months in 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.

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National Business Capital: Best Bad Credit Start Up Loan With Flexible Requirements

National Business Capital


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Pros

  • 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 marijuana industry (with 1+ year in business)

Cons

  • Rates can be high

Why We Chose National Business Capital For Bad Credit Startup Business Loans

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 business financing, including traditional small business loans, lines of credit, equipment financing, and SBA loans. 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.

With a large and varied lender marketplace and a commitment to servicing small businesses facing challenges, startups seeking a lender with flexible requirements should consider applying to National Business Capital.

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!

BusinessLoans.com 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.

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 (their 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:

  • 1+ year in business
  • $500K+ annual revenue
  • 580+ credit score

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Fundbox: Best Bad Credit Short-Term Loans For Startups

Total Rating 3.8
Rates & Fees3.1

Services3.6

Eligibility Requirements4.5

Application4.8

Sales & Advertising Transparency3.8

Customer Service3.0

User Reviews4.4



Pros

  • Simple application
  • Next-day funding
  • No draw fee, prepayment fee, origination fee, or maintenance fees

Cons

  • Doesn’t accept very poor credit or brand-new businesses

Why We Chose Fundbox For Bad Credit Startup Business Loans

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 six months under their belt and are already bringing in some revenue.

Businesses 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. That’s why we at Merchant Maverick are proud to feature Fundbox in this article.

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%
  • Draw fee: None

Fundbox Eligibility Requirements

With a minimum credit score of 600 and a six-month minimum time in business, Fundbox is suitable for both startups and subprime-credit borrowers. Your business does need to be bringing in at least $100K annually, and very poor credit applicants will not be approved.

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Upstart: Best Easy Approval Startup Business Loans For No Credit History

Upstart


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Pros

  • 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 Bad Credit Startup Business Loans

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 ranging from $1,000 to $50,000. 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 nonetheless 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 Rates & Fees

Here’s what Upstart discloses about its rates and fees:

  • Term length: 3 or 5 years (monthly repayments required)
  • APR: Fixed at 5.2%-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’s minimum credit score is just 300 (the lowest possible FICO score). Notably, Upstart will also consider applicants with no credit — that is, individuals who don’t have enough credit history to generate a FICO score.

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 annually.

Upstart does not currently serve residents of West Virginia or Iowa.

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Credibly: Best Merchant Cash Advances For Startups With Bad Credit

Credibly


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Pros

  • Can borrow up to $400K
  • Will accept very poor credit
  • Transparent rates and fees

Cons

  • High revenue requirements

Why We Chose Credibly For Bad Credit Startup Business Loans

Credibly originates several types of short-term loans, including merchant cash advances and working capital loans up to $400K, business lines of credit up to $250K, and others. This company is startup-friendly — though you do need to have been in business for six months — and will accept you even if you have very poor credit.

Note that some of Credibly’s products, including its lines of credit, are made available through Credibly’s network of external funding partners rather than through Credibly directly.

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 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 product. Your business must be bringing in $15K+/month ($180K/year) to qualify for a working capital loan or MCA. You must also have at least six months of business history.

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Kiva U.S.: Best Interest-Free Crowdfunded Loans For Startups With Bad Credit

Kiva U.S.


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Pros

  • No credit check
  • No interest or fees
  • Flexible repayment plans

Cons

  • $1,000 limit on startup loans
  • You’ll need to conduct a successful crowdfunding campaign

Why We Chose Kiva U.S. For Bad Credit Startup Business Loans

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. Individual lenders back these loans in amounts as small as $25 per lender.

According to Kiva, the ideal candidate for its crowdfunded loans is socially aware and has a strong online/social media presence. We advise visiting Kiva’s website to see the types of businesses that receive funding on the Kiva platform.

Note that these loans are very small. Though Kiva offers loans as large as $15,000, startup businesses that have been in operation for less than a year are only eligible for a $1,000 loan. 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. 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.

Get Started With Kiva U.S.

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How To Get Easy Approval Startup Business Loans With Bad Credit

Even with bad credit, you may still qualify for a startup small business loan.

First, assess and compare different lenders that cater to new business owners who have bad credit. Generally, you should be able to find a startup loan as long as you’ve been in business for at least a few months and your credit score is at least 500. You’ll also need to show that you have sufficient income (personal or business, depending on the lender’s requirements) to repay the loan.

Once you find a loan that appeals to you (and for which you’re eligible), it’s easy to apply online. If you meet the minimum criteria and are “pre-approved,” the lender will reach out and ask for more information for the underwriting process. Once you return the requested information, you will hopefully receive a “hard” approval and a loan offer. With most online lenders, you’ll receive your funds as soon as 24 hours to a few days after accepting the offer.

Check out our step-by-step breakdown of the startup loan application process for more details.

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:

For more business funding alternatives for bad credit, see our full list of options below.

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.

FAQs About Business Loans For Startups With Bad Credit

Can I get easy approval startup business loans with bad credit?

Some online and nonprofit lenders serve new business owners with bad credit, but loans for borrowers with bad credit tend to carry higher interest and have shorter repayment terms compared to traditional business loans. If you lack strong business credentials, it may also be difficult for you to get a loan larger than a microloan ($50K and smaller).

Can I get a bad credit startup business loan with no credit check?

Almost every lender will at least perform a soft pull of your credit to get an idea of where you stand in terms of credit. Conventional lenders like banks will likely always require a credit check, but there are a few lenders that don’t require a credit check.

Do I need collateral to get a bad credit startup loan?

Bad credit startup loans usually don’t require you to put up any specific collateral or business assets. However, most online startup loans require a UCC-1 blanket lien and/or a personal guarantee.

Can I get an SBA loan with bad credit?

You usually need to have at least fair credit to get an SBA loan. The SBA has different credit score requirements for different loans, but the minimums tend to be in the 600s. For example, the SBA 7(a) loan requires a score of 640, while an SBA Microloan has a minimum of 620.

What is the minimum credit score for the SBA?

The SBA Microloans program has the lowest credit score requirement. These loans have a minimum credit score requirement between 620 and 640 and require collateral.

Which loan company is best for bad credit business loans?

A couple of the best lenders for bad credit (credit scores less than 600) are Upstart, BusinessLoans.com, and Credibly.

Can I get an easy approval business loan with a 500 credit score?

It is difficult but possible to get a business loan with a 500 credit score. While you may find funding with a 500 credit score, it may not come in the form of a traditional loan. Merchant cash advances, accounts receivable factoring, and short-term loans often have lower credit score requirements than ordinary installment loans.

How can I start a small business with no money and bad credit?

There are a number of different tactics you can take to start a business when you have no money and bad credit. This includes adopting a business strategy with very low overhead or tapping non-traditional sources of financing. Learn more about how to start a small business with no money.

Can I get credit for my business with bad credit?

Yes, there are credit options for businesses with bad credit. These typically offset the risk of a bad credit score by looking at revenue, available assets that can be tapped for liquidity or used as collateral, and/or high interest rates.

Can I get startup business loans with no revenue?

There are a few lenders, including the “crowdlending” nonprofit Kiva U.S., that offer loans with no revenue requirements whatsoever. However, most startup business loans will carry some degree of revenue requirement. Some lenders offer equipment financing loans to businesses with no revenue yet, however.

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Jason Vissers

Jason Vissers

Senior Staff Writer at Merchant Maverick
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 and currently lives in Philadelphia, Pennsylvania.
Jason Vissers
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