5 Best Business Loans for Bad Credit in 2022

We’ve found the best bad credit business loans that don’t require a 750 credit score―or even a 600―to qualify for.
Best overall
Lendio
Lendio
3.1 out of 5 stars
3.1
Starting at
8% interest
  • Icon Pros  Dark
    560 minimum credit score
  • Icon Pros  Dark
    Loans up to $750,000
Best for 0% interest
Kiva
Kiva
3.1 out of 5 stars
3.1
0% interest
  • Icon Pros  Dark
    No min. credit score
  • Icon Pros  Dark
    Loans up to $15,000
Best for low rates
Accion
Accion Opportunity Fund
3 out of 5 stars
3.0
Starting at
5.99% interest
  • Icon Pros  Dark
    No min. credit score
  • Icon Pros  Dark
    Loans up to $100,000
See Loan OptionsAvailable via Lendio marketplace
Best for Square users
Square
Square Loans
3 out of 5 stars
3.0
Rates unlisted
  • Icon Pros  Dark
    No min. credit score
  • Icon Pros  Dark
    Loans up to $250,000
See Loan OptionsAvailable via Lendio marketplace
Best merchant cash advance
Lendr
Lendr
2.9 out of 5 stars
2.9
Starting at
12% fee
  • Icon Pros  Dark
    No min. credit score
  • Icon Pros  Dark
    Loans up to $500,000
See Loan OptionsAvailable via Lendio marketplace

We are committed to sharing unbiased reviews. Some of the links on our site are from our partners who compensate us. Read our editorial guidelines and advertising disclosure.

Worried bad credit is going to keep you from getting a small-business loan? Well, don’t give up hope just yet. While you may not qualify for the best terms and the lowest rates, you can still get financing as a business owner with a less-than-perfect credit score.

We’ve found 10 lenders that accept lower credit scores (below 600) or don’t check credit at all. 

Our top pick for most business owners is Lendio, since it gives you the most loan choices and lets you compare offers. But we’ve found nine other great lenders too, offering everything from microloans to invoice financing to lines of credit. This way you can be sure to find the right financing for your cash flow needs.


Our top-rated lender: Lendio

Lendio partners with over 75 lenders, which improves your odds and efficiency to get the funding you need.

Qualifications:

Money Approach

$50k in revenue

Calendar Approach

6 mos. in business

Analysis Approach

560 credit score


Best bad credit business loans compared

Lender
Loan min./max.
Lowest listed rate
Loan options
Get a loan

Lendio

$1,000/$500,000

8% interest

Invoice factoring, line of credit, & merchant cash advance

Kiva

$1,000/$15,000

0% interest

Microloan

Accion Opportunity Fund

$5,000/$100,000

5.00% interest

Term loan

Square Loans

$300.00/$250,0000

Unlisted

Short-term loan

Lendr

$5,000/$500,000

12% fee

Merchant cash advance & invoice factoring

Data as of 5/11/22. Offers and availability may vary by location and are subject to change.

Why your credit score matters to lenders

Lenders don’t lend money to businesses out of the kindness of their hearts—they want to get paid back (and then some).

That’s why they look at your credit score. Lenders need to make sure you’re trustworthy (or creditworthy), and your credit score is one indicator they use. For example, if you have a habit of paying back what you owe, you’re likely to have a good credit score. But if you have a track record of missing payments or you’ve defaulted on loans, that history will be reflected in a bad credit score and credit report.

In other words, lenders use your personal credit score to figure out whether or not you’ll repay your loan—and whether or not they should lend to you in the first place.

How your credit score affects your financing

Your credit score can affect both your chances of getting funded and the conditions of the funding you get.

Put simply, if you have a high credit score, you are more likely to get approved for loans. But if you have a low credit score, you are less likely to get approved.

Even if you do get approved, your credit score can affect funding conditions like your loan amount and interest rate. With a higher score, you’re more likely to qualify for higher loan amounts, lower interest rates, and more favorable repayment terms. But if you have a lower score, lenders might worry about your ability to repay a loan—which means they’ll give you a lower amount, higher rates, and shorter repayment terms.

So of course you want a higher credit score. But how do you get there?

Lendio: Best overall business lender for bad credit

Lendio
Lendio
  • X
    Starting at 8% interest
  • Check
    560 min. credit score
  • Check
    $50,000 min. annual revenue
  • Check
    6 mos. min. time in business

To understand why we like Lendio so much for bad credit loans, you need to understand what Lendio is and what it isn’t.

Lendio isn’t a direct lender—it’s a lending marketplace. So when you apply to Lendio, they'll use your information to hook you up with the best loans you can qualify for (but it doesn’t extend those loans itself). That means you can compare offers and make sure you’re getting the best loans with the best rates for your situation.

And good news: Lendio works with some of the lenders on this list (like Forward Financing), so you won’t miss out on your chance to get a loan from them—you’ll just have an easier time comparing your options. 

With one application going to many lenders, we think Lendio is the obvious first stop for most business owners with bad credit.

Strengths
Pro Bullet Fast application
Pro Bullet Wide variety of funding and lenders
Pro Bullet Personalized guidance and expertise
Weaknesses
Con Bullet High interest rates on some loans
Con Bullet Reports of hard credit inquiries

Kiva: Best for 0% interest

Kiva
Kiva
  • X
    0% interest
  • Check
    No min. credit score
  • Check
    No min. annual revenue
  • Check
    No min. time in business

Kiva works really differently than most other lenders. So differently, in fact, that it doesn’t charge any interest.

That’s just the tip of the Kiva iceberg though. Kiva doesn’t care how long you’ve been in business, how much revenue you earn, or your credit score. They accept all businesses and don't charge for borrowing. Amazing, right?

So why isn’t Kiva the top lender on our list? Well, Kiva loans max out at $15,000—too low for many working capital needs. Plus, Kiva’s unique funding model takes at least one month to get you money, which can be too long of a wait for some businesses. 

But if you can spare the time, Kiva’s no-interest microloans are worth waiting for.

Strengths
Pro Bullet Simple, quick process
Pro Bullet Low credit score requirements
Pro Bullet Large loans available
Weaknesses
Con Bullet Limited availability in some states
Con Bullet Potentially large fees

Accion Opportunity Fund: Best for low rates

Accion
Accion Opportunity Fund
  • X
    0% interest
  • Check
    No min. credit score
  • Check
    Min. annual revenue unlisted
  • Check
    1 yr. min. time in business

If you want low-interest rates but can’t make a Kiva loan work, we suggest looking at Accion Opportunity Fund instead.

Accion Opportunity Fund has very competitive starting rates on its business loans―just 5.99%. That’s not quite bank loan low, but it’s very low for an online lender. And like other lenders on this list, Accion Opportunity Fund doesn’t have a hard credit requirement. So you can qualify for its loans with less-than-perfect credit.

Now, to be clear, bad credit probably won’t earn you a 5.99% interest rate. But working with a lender that has low starting rates is still likely to get you a better rate than working with a lender that has high starting rates.

Put simply, Accion Opportunity Fund gives you the best shot at competitive interest rates despite a lower credit score.

Strengths
Pro Bullet Low starting rates
Pro Bullet Term loans for many credit scores
Pro Bullet Business coaching and other help
Weaknesses
Con Bullet Some application requirements unlisted
Con Bullet Slower funding times

Square Loans: Best for Square users

Square
Square Loans
  • X
    Rates unlisted
  • Check
    No min. credit score
  • Check
    $10,000 min. annual revenue
  • Check
    1 yr. min. time in business

Do you use Square for credit card processing? Then you should check to see if you’re eligible for a loan through Square.

Square offers its card processing customers a chance at a working capital loan. And because your eligibility comes from your Square processing habits, Square doesn’t care about your credit score. And while it does have some revenue and time-in-business requirements, Square’s borrower requirements look pretty accessible compared to many lenders.

Unfortunately, Square doesn’t let you manually apply for a loan. If they think you qualify, they'll simply offer you one. So Square loans aren’t great for urgent funding needs (assuming you don’t already have an offer). And yeah, they’re just for Square users.

If you do use Square, though, its loans might offer the easiest way to get a business loan with bad credit.

Strengths
Pro Bullet Flexible borrower requirements
Pro Bullet No credit check
Pro Bullet No collateral <$75,000
Weaknesses
Con Bullet Offers just for Square users
Con Bullet No way to apply for a loan

Lendr: Best for merchant cash advances

Lendr
Lendr
  • X
    Starting at 12% fee
  • Check
    No min. credit score
  • Check
    $10,000 min. monthly revenue
  • Check
    1 yr. min. time in business

We don’t love merchant cash advances. But if you’re going to get one, Lendr would be the best pick.

For starters, Lendr has all the advantages you’d expect from any merchant advance company: They don't care much about your credit score and you can get funded very quickly. But they also have a few other advantages, like great customer reviews, decent loan sizes, and more than one type of financing product.

Yes, they still come with the typical merchant cash advance downsides―like large fees that get described in a somewhat misleading way. In other words, you’ll want to carefully read the fine print and make sure you understand all your terms.

But thanks to those upsides we mentioned, Lendr is our favorite source for merchant cash advances.

Strengths
Pro Bullet Excellent customer reviews
Pro Bullet Large range of loan amounts
Pro Bullet Low credit requirements
Weaknesses
Con Bullet Potentially misleading fees
Con Bullet Working capital financing only

Honorable mentions for bad-credit business loans

Haven’t seen the right lender for you just yet? We’ve found some other companies that might work better with your credit score and situation.

Honorable mentions for bad-credit business loans

Bullhorn
Credit reporting
PayPal Working Capital, Square Capital, and Stripe Capital don’t report to credit bureaus. So getting a loan from them won’t hurt your credit score—but it won’t help it either.
Don't qualify for a business loan? Get a personal loan instead.

PayPal Working Capital: Best for PayPal users

PayPal Working Capital
PayPal Working Capital
  • X
    Rates unlisted
  • Check
    No min. credit score
  • Check
    $15,000 min. annual revenue
  • Check
    3 mos. min. time in business

If you make at least $15,000 a year in PayPal sales, you might qualify for a PayPal Working Capital loan—no credit check needed. These loans work a lot like merchant cash advances, meaning PayPal will take a percentage of your sales to repay the loan.

The rates can get high, but it’s a convenient way to get financing without worrying about your credit.

Stripe Capital: Best for Stripe users

Stripe
Stripe Capital
  • X
    Rates unlisted
  • Check
    No min. credit score
  • Check
    $10,000 min. annual revenue
  • Check
    1 yr. min. time in business

Stripe Capital operates just like PayPal Working Capital and Square Capital. If you make enough sales via Stripe, you can get approved for a Stripe Capital loan without a credit check.

Stripe is pretty cagey about the costs of its loans, but you should expect high fees (as you would with any merchant cash advance).

Payability: Best for e-commerce sellers

payability-logo
Payability
  • X
    Starting at 0.5% weekly fee
  • Check
    No min. credit score
  • Check
    $10,000 min. monthly revenue
  • Check
    9 mos. min. time in business

Payability works specifically with e-commerce sellers (on Amazon, Walmart, ebay, and more sites) and it offers fast working capital. Payability only cares about your e-commerce revenue―not your credit score.

Of course, as with any cash advance company, Payability costs a lot (though you can reduce your fees by repaying your advance quickly). So be sure to calculate carefully before borrowing.

Forward Financing: Best customer reviews

Forward Financing logo
Forward Financing
  • X
    Rates unlisted
  • Check
    500 min. credit score
  • Check
    $10,000 min. monthly revenue
  • Check
    1 yr. min. time in business

Want to go with a lender that customers love? Forward Financing has just about the best customer reviews we’ve seen for a lending company (it maintains a 4.9 out of 5 on Trustpilot1), and accepts credit scores as low as 500.

Unfortunately, they just offer merchant cash advances, so you have to deal with high costs and confusing repayment terms. But given how much users love it, Forward Financing must be doing something right.

National Business Capital: Another lending marketplace

National Business Capital
National Business Capital
  • X
    Rates unlisted
  • Check
    No min. credit score
  • Check
    $120,000 min. annual revenue
  • Check
    No min. time in business

Like Lendio, National Business Capital is a lending marketplace. That means you apply for lots of lenders with just one application. So if Lendio doesn’t strike your fancy, National Business Capital offers a good alternative.

Be sure to note, though, that National Business Capital has higher revenue requirements for would-be borrowers—and they don't list their rates or fees. That’s why we suggest looking at Lendio first and using National Business Capital as a backup.

The takeaway

As we said earlier, we found that Lendio has the best options for business owners with bad credit scores since it gives you plenty of loan options and lets you compare loan offers. 

But Lendio is just one option. If you don’t want to pay any interest, you can go with Kiva. Or if you simply want very competitive rates, there’s Accion Opportunity Fund. Square users will likely want to stick to Square Loans. And for business owners that want a merchant cash advance, we suggest going with Lendr.

No matter which of the lenders you choose, your less-than-perfect credit doesn’t have to be a deal-breaker when it comes to funding your business.

Bad-credit loans often come with higher rates—so make sure you understand what you’ll be paying by checking out our guide to APR.

Related content

Methodology

We dove into more than 50 business lenders’ websites to figure out which ones offer loans to business owners with bad personal credit. Once we’d found all the places offering bad credit loans, we scored them on factors like loan costs, funding times, and customer reviews. We used those scores to determine which lenders made the cut―and then to rank and review them.

Bad-credit business loan FAQ

What qualifies as bad personal credit?

According to the official FICO definition, a bad credit score falls between 300 and 600. (Of course, people sometimes say they have “bad credit” when they mean they have a lower credit score than they’d like.)

Here’s the full breakdown of FICO credit ratings:

Credit score ratings

Credit score tier
FICO credit score

Excellent credit

750 +

Good credit

700–749

Fair credit

650–699

Poor credit

600–649

Bad credit

Below 600

Can I get a business loan if I have a 500 personal credit score?

Yes, it’s possible to get business financing if you have a 500 credit score—but it might be a challenge, and you’ll probably pay higher rates than borrowers with good credit.

Kiva, PayPal Working Capital, Square Capital, Stripe Capital, and Forward Financing (all reviewed above) offer funding to business owners with a 500 credit score—assuming, of course, that you meet other loan application criteria, like minimum revenue or time in business.

What is the minimum credit score requirement for a business loan?

There is no minimum credit score requirement to get a business loan, but you’ll have a much easier time qualifying if you have a score over 600 (and preferably higher).

That being said, individual lenders often do require a minimum credit score from borrowers. Most banks require at least a 680 to qualify for a traditional loan. Likewise, the minimum score to qualify for an SBA loan is 650.

So if you have a 550 personal credit score, you will have limited choices. But between lenders with low credit requirements and lenders that don’t check credit, you do have some potential options.

How can I get a loan if I have terrible credit?

You have a few options for increasing your chances of getting a business loan with terrible credit:

  • Ask someone with good credit to cosign on your loan
  • Secure your loan with valuable collateral
  • Apply with a lender that doesn’t do credit checks

You’ll also have an easier time getting a business loan with bad credit if you can offer high revenue and a stable, established business.
And of course, one of the best ways to improve your odds is to improve your credit score. It will take time, yes, but it’s worth working on.

What types of business loans are best for bad credit?

If you have bad credit, business financing options like equipment financing, invoice financing, and merchant cash advances will probably be your best bet.

Because these loans require collateral (whether that’s the equipment you purchase, your invoices, or a percentage of your credit card sales), they’re often easier to qualify for than traditional term loans.

You may also qualify for some short-term loans, like the ones offered by Square Loans, Stripe Capital, and PayPal Working Capital.

Disclaimer

At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.

Sources

  1. Trustpilot, “Forward Financing” Accessed May 11, 2022.
Chloe Goodshore
Written by
Chloe Goodshore
Chloe covers business financing and loans for Business.org. She has worked with many small businesses over the past 10 years, from video game stores to law firms. Those years watching frustrated business owners try to sift through their many options gave her a passion for breaking down complex business topics. She wants to help business owners spend less time agonizing over their businesses so they can spend more time running them.
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