The 10 Best Small Business Loans For Startups With Bad Credit

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.

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.

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%.

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.

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.

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.

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).

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.

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).

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.