A startup business owner can get a small business loan even with bad credit. This is a fact that the overall financial stability of a business is more important than its owner's credit score. A maximum of $30,000 of annual revenue, a credit score of 500, and at least six months of business operation are common requirements from lenders.
Products for guaranteed small business startup loans include merchant cash advances (MCA), invoice factoring, working capital, lines of credit, equipment financing, business expansion, and SBA loans.
If you are a business owner with poor credit, be ready to pay higher interest rates and fees. Some lending products, like a merchant cash advance or invoice factoring, depend on future capital or sales that have been invoiced but have yet to be paid.
Best small business loans for bad credits for 2022
To get the best startup financing, here's a comparison of the best small business loans for people with bad credit history.
Best for short-term loans: PayPal
Best for high revenue: Credibly
Best for long-term financing: Rapid Finance
Best for a business line of credit: Bluevine
Best for working capital loans: Fora Financial
Best for short-term loans: PayPal
Pros
- The minimum credit score required is 580
- Business loan terms range from 13 to 52 weeks
- Same-day funding
Cons
- Business must have an annual revenue of $33,300
- Not available for startups
PayPal is an online payment method that provides LoanBuilder, a short-term small business financing product. It's also referred to as a PayPal Business Loan. Lending is carried out through FDIC-member WebBank. PayPal Working Capital offers short-term business loans that are similar to MCAs in working.
Because the maximum loan duration is 52 weeks and the minimum credit score required to qualify is 580, this company offers the finest short-term small business loans for people with bad credit.
To be eligible for a LoanBuilder loan, a company must have been operating for at least nine months.
Best for long-term financing: Rapid Finance
Pros
- Loans up to $1 million
- Fast funding and closing
- Less strict minimum qualification requirements
Cons
- Repayment terms are not available online
- Does not disclose interest rates online
Rapid Finance, a Quicken Loans sibling company, provides funding options to small-sized businesses. Its website has stellar testimonials and provides one of the most extended terms for business loans, at least 60 months. Rapid Finance is the best choice for long-term business loans with bad credit. Additionally, you frequently receive loan approval and funds within hours of applying.
You can qualify for many of its small business loans if your business is at least three to six months old. Like most of its short-term loans, other loan kinds call for at least two years in operation. However, a blanket lien is necessary.
Contact customer service for information on repayment schedules because there are no public interest rates online.
Best for high revenue: Credibly
Pros
- Wide range of loan products
- The minimum credit score required is 500
- Quick funding times
Cons
- Requires daily, and weekly repayment
- Requires revenue of $15,000 per month
Credibly provides a wide range of business loans for bad credit, including working capital loans, merchant cash advances, and business lines of credit. Additionally, because Credibly only requires a business operation for at least six months, new businesses may find it simpler to obtain Finance.
Credibly is an excellent alternative if you have revenue because you need at least $15,000 in monthly revenue to be eligible for a small business loan. Fast funding is available, and a 500 credit score is required.
You may borrow up to $400,000 with loan durations of up to 24 months, depending on whatever Credibly lending product you select.
Best for a business line of credit: Bluevine
Pros
- Same-day funding
- Low credit score requirement
- Business lines of credit up to $250,000
Cons
- Not available to business owners in Peurto Rico, South and North Dakota, and U.S. territories
- Monthly revenue requirements
BlueVine, a financial technology startup, offers funding options to small businesses throughout the country. It focuses especially on checking accounts and commercial lines of credit. BlueVine no longer provides invoice financing as of December 2021.
Business owners with bad credit who want to use a line of credit on an on-demand basis can get funds ranging from $6,000 to $250,000. BlueVine's Flex 6 payment structure enables borrowers to make weekly payments over 26 weeks.
Additionally, if you pay off your Flex 6 debt in 45 days, you can qualify for an increase in your credit limit. BlueVine also provides its Flex 12 structure. However, it only works well for candidates with poor credit because it demands a minimum credit score of 650.
Best for working capital loans: Fora Financial
Pros
- Quick Funding
- No collateral required
Cons
- There are requirements for revenue and the minimum business age.
Young yet established small businesses finding quick finance or borrowers who might not be eligible for typical bank financing can benefit from Fora Financial.
Fora Financial is the best choice for working capital loans because it provides up to $750,000 without limitations on how to use it. Additionally, Fora doesn't demand collateral and can release money as soon as 72 hours following approval. If you want to find out if it's a suitable fit for your company, you can get a free, no-obligation quote.
Bottom Line
You may expand your business, pay for payroll, buy supplies, and control cash flow with the help of small business loans. Finding a lender can be challenging if you have bad credit, but many loan options are accessible even with credit ratings as low as 500.
