The 7 Best 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’s rates and fees vary depending on the lender and loan type you ultimately get matched with.

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.

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.

As BusinessLoans.com is a loan marketplace, your rates and fees will depend on the lender and loan product you end up receiving.

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.

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!

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.

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

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.

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

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.

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.

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’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.

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’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’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.

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. 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.

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.