The 10 Best Business Loans For Startups With Bad Credit
Most of these lenders will accept scores below 600. Compare these business loans for bad credit to find the right startup loan for you.

Getting a startup business loan when you have bad credit can seem like an impossible task. But while bad credit can make it more difficult to get a startup loan, there are still ways to finance your new business venture.
To make things easier on you, we’ve put together a list of some of the best startup business loan options for bad credit. We’ll also look at what constitutes bad credit and what business lenders are looking for in your application.
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Other Featured Options:
- Credibly:
- Minimum Credit Score: 500
- Time In Business: 6 months
- Revenue: $180K/year
- Avant:
- Minimum Credit Score: 580
- Time In Business: N/A
- Revenue: N/A
- PayPal Working Capital:
- Minimum Credit Score: N/A
- Time In Business: 3 months
- PayPal Revenue: $15K-$20K annually
- Accion:
- Minimum Credit Score: Varies by region
- Time In Business: N/A
- Revenue: Sufficient cash-flow to repay loan
- Kiva U.S.:
- Minimum Credit Score: N/A
- Time In Business: N/A
- Revenue: N/A
Read more below to learn why we chose these options.
Table of Contents
What Is A Bad Credit Score?
Type Of Credit | Credit Score |
---|---|
Poor | 300-579 |
Fair | 580-669 |
Good | 670-739 |
Personal FICO credit scores below 670 are considered subprime credit. Having a subprime credit score signifies to lenders that the borrower may have difficulty repaying their loan. However, there are two categories of subprime credit: bad/very poor credit and fair credit.
Credit scores under 580 are considered “bad” or very poor, based on the FICO credit scoring system. Scores ranging from 580 to 669 are considered fair (but are still subprime).
Though credit scores can go as low as 300, even “bad credit business loans” typically do not accept applicants with scores below 500, and some of these lenders require that borrowers have a minimum score of 580 or 600.
10 Best Startup Business Loans For Bad Credit
The best startup business loans for business owners with bad credit are as follows.
1. National Business Capital: Best Flexible Borrower Requirements For Startups
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 marijuana industry businesses (with 1+ year in business)
Cons
- Rates can be high
National Business Capital is an online lending marketplace with 75+ lenders and a business model similar to Lendio’s. 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.
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.
Interestingly, National Business Capital will lend to cannabis-related businesses if they have at least one year in business.
Get Started with National Business Capital
2. Lendio: Best For Equipment Financing 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
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 no longer publishes specific borrower requirements and can likely find lenders willing to work with poor credit scores. 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 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 also 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’s network includes more than 75 lenders, including big names such as Kabbage Funding, OnDeck, Amex, and BlueVine. In the equipment financing space, Lendio connects with Balboa Capital, B2B Leasing, Simmons Bank, and others.
Any business can apply for Lendio, but for the best chance of getting funded, Lendio recommends that in addition to a 550+ credit score, you have six months in business and make at least $10K monthly.
3. Upstart: Best For Startups With No Credit History
Upstart |
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Pros
- No time-in-business or business income requirement
- Builds personal credit
- Will consider applicants with no credit
Cons
- The origination fee is taken off the top of the loan
Personal loans are a way brand-new businesses can 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. Upstart’s minimum acceptable credit score is just 580 (technically fair but still subprime). 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.
Loans through Upstart have three or five-year terms, with monthly repayments. After you accept an Upstart loan offer, the funds will usually hit your account by the following business day. As far as rates, Upstart APRs typically range from 6.76%-35.99%.
4. Fundbox: Best Short-Term Loans For Startups
Fundbox |
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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
Fundbox has two convenient lending products for newer businesses with subprime credit: revolving lines of credit and term loans. Though these short-term loans aren’t a good fit if your credit is completely trashed or your business isn’t making money yet, Fundbox loans are quite accessible to businesses that have six months under their belt and are already bringing in some revenue. Businesses will receive a funding decision within minutes of submitting your application, and funds can arrive in your account as soon as the next business day.
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 (making Fundbox slightly easier to qualify for than BlueVine), and very poor credit applicants will not be approved.
You will also have to pay the loan quite quickly — in 12 or 24 weeks, depending on your offer — and the maximum borrowing amount is $150K. So larger and more established businesses will get better terms with another lender.
5. BlueVine: Best Line Of Credit For Startups
BlueVine |
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Pros
- On-demand access to funds
- Same-day funding
- Serves both B2B and B2B companies
Cons
- Doesn’t accept credit scores below 600
BlueVine is one of our favorite online lenders in the small business lending space. Specifically, BlueVine offers small business lines of credit up to $250,000. The terms are fair and transparent, and BlueVine is also very easy to apply for—just provide a connection to your bank and some basic details about your business. This LOC is revolving, which means that you can withdraw funds at any time, and as you repay what you borrow, your credit line is replenished.
To qualify for a BlueVine LOC, you will need a credit score of 600 and 6 months in business, so while these LOCs are technically available to startups with bad credit, not all businesses will qualify. Still, BlueVine lines of credit are much easier to qualify for than bank lines of credit, or other online lines of credit that require good credit scores.
As well as lines of credit, BlueVine also offers business checking services and a Bill Pay service that allows businesses to pay their vendors with a credit card even if that vendor doesn’t accept credit cards. In the past, BlueVine also offered invoice factoring, but the company recently suspended its invoice factoring product and has transferred all existing factoring customers to FundThrough.
6. Credibly: Best Merchant Cash Advance 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
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. Woo-hoo!
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. 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.
Credibly’s revenue requirements vary based on product, but they are on the high side compared to those of some other online lenders; your business must be bringing in $15K/month ($180K/year) to qualify for a working capital loan or MCA. However, the money comes through fast, and the amounts you can borrow are pretty high considering the relaxed borrower requirements. Credibly is also transparent about its rates and requirements, listing all the information you need to know on its website.
7. Avant: Best Small Personal Loans For Startups With Bad Credit
Avant |
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Pros
- No time-in-business or business income requirement
- Quick time-to-funding
- Monthly repayments
Cons
- A one-time administration fee is taken off the top of the loan
Avant is a reputable provider of small personal installment loans from $2K to $35K that can be used for business, including startup expenses. It also accepts credit scores that most personal lenders would balk at (as low as 580).
While Avant accepts subprime-credit (though not very-poor-credit) borrowers, you may be denied funding for other reasons, such as insufficient personal income to meet the incremental payments. It does not have any business income requirements, however.
Avant’s rates are not cheap, with APRs ranging from 9.95% to 35.99%, but they are fair and not predatory (especially compared to a lot of other personal lenders, such as payday lenders).
8. PayPal Working Capital: Best For Startup PayPal Sellers
PayPal Working Capital |
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Pros
- No credit check
- Easy, automatic repayments
- Quick access to cash
Cons
- Only available to PayPal sellers
PayPal Working Capital offers short-term loans that function similar to merchant cash advances. These loans have no credit score requirements and are good options to consider if you already do business through PayPal.
As with most other short-term lending options, PayPal’s Working Capital doesn’t charge interest. Instead, you are charged a one-time fee that you repay along with the loan. PayPal will then collect a small percentage of your daily sales until you have repaid the loan and the fee.
The application can be easily accessed within your PayPal account, and PayPal does not check your credit at all because it’s strictly based on your PayPal sales. If you have a PayPal Business or Premier account that’s been open for at least three months and is processing a certain amount of sales ($15K/year for Business accounts or $20K/year for Premier accounts), you can get funded within minutes of accepting a loan offer. PayPal also offers business loans through LoanBuilder, and those loans are open to all businesses and not just PayPal sellers. However, businesses need at least nine months in business to qualify for a LoanBuilder loan.
9. Accion: Best Microloans For Startups With Bad Credit
Accion |
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Pros
- Low-interest microloans
- Targeted to marginalized business owners
- Monthly repayments
Cons
- Loan offers limited by region
Accion is a nonprofit CDFI offering short- and medium-term installment loans to startups and existing businesses. These loan products mostly include micro-loans under $50K, but there are also some offers for loans as large as $1 million. Accion specializes in lending to minority-owned businesses and women-owned businesses.
If you have poor personal credit but need a small startup loan, Accion is one of the few reputable online lenders that can help you without screwing you over. The only caveat is that loans are offered on a regional basis. You’ll only be able to apply to whichever loans (if any) are available in your area.
To qualify for an Accion loan, you need a credit score of 575 (or 550 in some areas) and sufficient cash flow to repay the loan. Startups also need to have less than $3K in outstanding debt, a business plan with a 12-month cash flow projection, and a partner referral (such as SCORE or SBDC).
10. Kiva: Best Crowdfunding For Startups
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
Kiva U.S. 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.
Some of Kiva’s benefits are that it has 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 the service will accept just anyone.
Kiva favors community-minded businesses with a compelling story — after all, you need to convince individuals browsing the site to lend to your business instead of another business. Kiva says the ideal candidate for its services is socially aware and has a strong online and social media presence. It’s probably a good idea to go to 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.
Alternatives For Borrowers With Bad Credit
Applying for small business startup loans with bad credit can be a big disappointment if your credit is so bad, or your business is so new, that you don’t qualify for any loans at all. The same goes for new or aspiring business owners searching for first-time business loans with no revenue yet. Again, 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 even if you don’t qualify for any new business loans. Consider the following alternatives to startup business loans for bad credit:
Small Business Credit Cards:
If you aren’t quite ready for a business loan, a small business credit card for bad credit can be a good way to pay for startup expenses while building your credit. Business credit cards are also an effective way to establish business credit history and/or separate your personal credit history from your business credit history.
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 you will need 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.
Small Business Grants:
A business grant is a sum of money that you do not need to repay. And since it’s not a loan, there is no credit check involved. Various organizations, local governments, and private companies offer small business grants, including startup business grants. However, your company will usually need to meet some specific criteria to qualify, for example, be woman-owned or operating in a specific city and/or industry.
Crowdfunding:
In addition to crowdfunded loans like Kiva, there are other crowdfunding platforms for businesses that 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 they are soliciting funds for.
How To Get A Startup Loan With Bad Credit
Even if you have bad credit, you may still qualify for a startup loan. First, evaluate 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 have at least a few months in business 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.
If you find a loan that you are interested in and are eligible for, 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. Get the step-by-step breakdown on the startup loan application process.
Bad-Credit Startup Loan Application Tips
The great thing about all of these bad-credit startup loans is that, with a few exceptions, the application process is quick, painless, and entirely online. Here are a couple of tips for applying:
- Don’t waste your time applying for loans that you don’t meet the minimum qualifications for
- When it comes to loans you do meet the minimum qualifications for, apply for multiple loans and then compare your offers to choose the best one (there’s no risk in getting pre-approved, as this usually only requires a “soft” credit check, which does not impact your credit score)
If you check out some loan or credit card options and are not pleased with the offers you’re getting, you might consider:
- Taking steps to improve your personal credit score
- Looking into alternative business financing options such as crowdfunding
- Waiting until you’ve been in business 12 months, after which you’ll qualify for more loans
Have more questions about getting startup business loans with bad credit or need a personalized recommendation? Leave your question in the comments!
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Divvy offers a free corporate card for virtually any business. The Credit Builder card is suitable for business with bad credit or no credit. Start earning rewards with your corporate spending today. Get your free card.
FAQs About Startup Business Loans For Bad Credit
In Summary: 10 Best Startup Business Loans For Bad Credit
- National Business Capital:
- Time In Business: 6 months (0 if your credit is 650+)
- Minimum Credit Score: 550
- Revenue: $10,000 per month
- Lendio:
- Minimum Credit Score: N/A
- Time In Business: N/A
- Revenue: N/A
- Upstart:
- Minimum Credit Score: 580
- Time In Business: N/A
- Revenue: N/A
- Fundbox:
- Minimum Credit Score: 600
- Time In Business: 6 months
- Revenue: $100K/year
- BlueVine:
- Minimum Credit Score: 600
- Time In Business: 6 months
- Revenue: $10,000 per month
- Credibly:
- Minimum Credit Score: 500
- Time In Business: 6 months
- Revenue: $180K/year
- Avant:
- Minimum Credit Score: 580
- Time In Business: N/A
- Revenue: N/A
- PayPal Working Capital:
- Minimum Credit Score: N/A
- Time In Business: 3 months
- PayPal Revenue: $15K-$20K annually
- Accion:
- Minimum Credit Score: Varies by region
- Time In Business: N/A
- Revenue: Sufficient cash-flow to repay loan
- Kiva U.S.:
- Minimum Credit Score: N/A
- Time In Business: N/A
- Revenue: N/A
Can i still get a approval with a ucc lien
This comment refers to an earlier version of this post and may be outdated.
Hi Hubert,
A UCC lien can make it difficult to obtain additional financing while the lien is still active, even if your loan is in good standing. This is because many lenders do not want to take second position on your collateral. If you have separate collateral you can use to secure a second loan, this may not be a problem. But again, many types of small business loans use a UCC blanket lien, which covers all of your assets. You can read more about this in our post What A UCC Filing Is & How It Could Affect Your Small Business. Best of luck to you!
This comment refers to an earlier version of this post and may be outdated.
I need start my business with 6,00000 Only.
This comment refers to an earlier version of this post and may be outdated.
Hi Abubakar,
We hope our startup loan recommendations help you find a bit more funding if that’s what you’re after. And if you have any specific questions, we are happy to help. Good luck!
This comment refers to an earlier version of this post and may be outdated.
Yes I have a business account just open on the 17th of last month I have my CDL I’m trying to purchase a dually truck and trailer and start rolling money in my credit score is 523 smh but I have plans that will make alot of money just need someone to help I’ll even sign another contract saying I will double or triple that’s how confident I am about my idead
This comment refers to an earlier version of this post and may be outdated.
Hi Dexter,
It sounds like you have some big plans! That’s very exciting. We hope the resources and links we provided in the post help you find the funding you’re seeking. Keep us posted!
This comment refers to an earlier version of this post and may be outdated.
I have a credit score of 640 and I have been denied by everyone on this list. I was denied for both PPP and EIDL loan. The Small Business Association has also offered no help. But we see large corporations daily who receive help and give the money to shareholders but continue lack of help for minority owned businesses.
This comment refers to an earlier version of this post and may be outdated.
What is the best alternative of MCA loans.
This comment refers to an earlier version of this post and may be outdated.
Hi EH,
There are many variables to consider when deciding what is best for any given business, but generally speaking, a short-term business loan can be a very good alternative to a Merchant Cash Advance. Our Merchant’s Guide to Short-Term Loans may be helpful to you.
This comment refers to an earlier version of this post and may be outdated.
Ok, I’m confused. The top of this article says, Don’t Let Bad Credit Stop You From Getting A Startup Loan,” PayPal doesn’t do start-up loans. Now, did you actual research this article, or did you just type “start-up loans” into Google? I even clicked on the Paypal link above and it didn’t even go to Paypal. In fact, if you go over to PayPal, it says that you have to have a “working history with a Paypal account” and nothing about start-ups.
This comment refers to an earlier version of this post and may be outdated.
As we state in the article, PayPal Working Capital is a startup loan option for businesses who already do businesses with PayPal— i.e., you have a PayPal Business or Premiere account. A startup is defined as a business that’s been around for 6 months or less, and you only need to have 3 months history with PayPal to qualify for a PPWC loan. So no, it won’t be an option for you if you don’t have a PayPal account and you just started your business today. 🙂
This comment refers to an earlier version of this post and may be outdated.
So, you really can’t help people who are looking for start-up financing in the first place? I’m sorry, but when people hear the word “start-up” they assume that they are looking for capital in the first place…when they haven’t done in sales in the first place. Now, can you help me?
This comment refers to an earlier version of this post and may be outdated.
Hi Greg,
This particular post pertains to “businesses six months old or newer and “bad credit” to be a score of 600 or lower,” though typically speaking, startups are considered businesses less than 2 years old. You’d be pretty fortunate to find a traditional lender willing to fund a startup without any proven sales history, even with collateral. Startups are most often funded by their founders until they get an idea off the ground. Luckily, crowdfunding or venture capitalists often come into play. Equipment financing can also be a quick and easy way to purchase the necessary equipment to start your business. And home equity loans are a good option for many entrepreneurs. We’ve got several posts on startup grants as well. That’s a pretty healthy list of helpful resources for startups! I hope you find something in there that will help you take your idea to the next level. If not, we will keep trying! We don’t have all the answers, but we sure try to help our readers find as many as possible! Best of luck to you!
This comment refers to an earlier version of this post and may be outdated.
Jessica Dinsmore you are right. Lendio is Awesome … I worked with them when I started my first business..
This comment refers to an earlier version of this post and may be outdated.
Thanks for your good website and information !
This comment refers to an earlier version of this post and may be outdated.