Best Options for Bad Credit Business Loans
| Option | Min Credit | How It Works | Best For |
|---|---|---|---|
| Fundbox | 600 | Invoice financing, LOC based on invoices | B2B businesses with invoices |
| BlueVine | 625 | Revenue-based underwriting | Established businesses, $500K+ revenue |
| Lendio Marketplace | 550+ | Matches you with 75+ lenders | Finding any available option |
| SBA Microloan | None | Nonprofit lenders, up to $50K | Startups, underserved businesses |
| Merchant Cash Advance | 500 | Advance on future card sales | Retail, restaurants with card revenue |
| Equipment Financing | Any | Equipment is collateral | Businesses needing equipment |
MCAs provide upfront cash in exchange for a percentage of future daily card sales. No credit check required — approval based on card transaction volume. The cost: factor rates of 1.2–1.5x (20–50% effective APR). Only use if no other option exists — the cost is very high compared to traditional loans.
If you need capital to purchase equipment, equipment financing uses the equipment itself as collateral — eliminating the credit score requirement for most lenders. Rates are 4–20% APR, terms up to 7 years. Works for any equipment: machinery, vehicles, technology, medical equipment.
Frequently Asked Questions
It's difficult but possible through: merchant cash advances (no credit check, expensive), invoice financing (based on invoice quality not credit), equipment financing (equipment is collateral), or SBA microloans from nonprofit lenders. Expect higher rates and shorter terms. Focus on improving your score to 600+ before applying for larger amounts.
Yes — each formal application causes a hard inquiry. To minimize damage: use pre-qualification tools (soft pull, no impact) first, then formally apply to only 1–2 lenders with the best pre-qualified offers. Marketplace lenders like Lendio match you with multiple lenders with a single application and one hard inquiry.