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The 7 Best Startup Business Loans With Bad Credit

Compare these small business loans for bad credit to find the right startup loan for you. Most of these lenders will accept scores below 600.

    Jason Vissers

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Advertiser Disclosure: Our unbiased reviews and content are supported in part by affiliate partnerships, and we adhere to strict guidelines to preserve editorial integrity.

Getting startup business loans with bad credit may seem nearly impossible. However, while having a bad credit score can make it harder to get a startup loan for your small business, there are still ways to finance your new venture. You can even find small business loans for startups that aren’t yet earning revenue.

To help you on your quest for funding, we’ve put together this list of the best small startup business loan options for bad credit. We’ll also look at what constitutes bad credit and what business lenders want to see in your application.

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  • Best Startup Loan For Flexible Borrower Requirements
  • Minimum Credit Score: 580
  • Minimum Revenue: $10,000/month
  • Best Startup Loan For Flexible Borrower Requirements
  • Minimum Credit Score: 580
  • Minimum Revenue: $10,000/month

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  • Best Equipment Financing Loans For Startups With Bad Credit
  • Minimum Credit Score: N/A
  • Revenue: N/A
  • Best Equipment Financing Loans For Startups With Bad Credit
  • Minimum Credit Score: N/A
  • Revenue: N/A

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  • Best Bad Credit Startup Loans For Borrower Support
  • Minimum Credit Score: N/A
  • Revenue: N/A
  • Best Bad Credit Startup Loans For Borrower Support
  • Minimum Credit Score: N/A
  • Revenue: N/A

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  • Best Short-Term Loans For Startups
  • Minimum Credit Score: 600
  • Revenue: $100K/year
  • Best Short-Term Loans For Startups
  • Minimum Credit Score: 600
  • Revenue: $100K/year

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  • Best Easy Approval Loans For No Credit
  • Minimum Credit Score: 600
  • Revenue: N/A
  • Best Easy Approval Loans For No Credit
  • Minimum Credit Score: 600
  • Revenue: N/A

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  • Best Merchant Cash Advance For Startups
  • Minimum Credit Score: 500
  • Revenue: $15K/month
  • Best Merchant Cash Advance For Startups
  • Minimum Credit Score: 500
  • Revenue: $15K/month

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  • Best Crowdfunding For Startups
  • Minimum Credit Score: N/A
  • Revenue: N/A
  • Best Crowdfunding For Startups
  • Minimum Credit Score: N/A
  • Revenue: N/A

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Table of Contents

Can You Get Startup Business Loans For Bad Credit Guaranteed?

Getting small business startup loans with bad credit can be hugely disappointing if your credit is so bad — or your business so new — that you don’t qualify for any loans at all. The same goes for new or aspiring business owners searching for first-time business loans with no revenue yet.

Sadly, there is no such thing as a startup loan with guaranteed approval, especially for new businesses that can’t meet minimum qualifications. However, there are still some financing options available to you even if you don’t qualify for any new business loans.

What Is Considered A Bad Credit Score?

Type Of Credit Credit Score
Poor 300-579
Fair 580-669
Good 670-739

So, how do you define a bad credit score, anyway? Personal FICO credit scores under 670 are considered subprime. Having a subprime credit score tells lenders that the borrower may have difficulty repaying a loan. However, there are two categories of subprime credit: bad/very poor credit and fair credit.

Credit scores below 580 are considered “bad” or very poor, based on the FICO credit scoring system. Scores between 580 and 669 are considered fair, but still subprime.

Though credit scores can go as low as 300, even “bad credit business loans” tend not to accept applicants with scores below 500 — many of these lenders require a minimum score of 580 or 600.

7 Best Startup Business Loans For Bad Credit

If you’re seeking startup business loans with bad credit, the following list of funding options is for you. These options include crowdfunding, equipment financing, short-term loans, and lines of credit, and can be accessed by small business owners with bad credit or no revenue.

1. National Business Capital: Best Bad Credit Start Up Loan With Flexible Requirements

National Business Capital

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Pros

  • No credit check for certain financing products (if you meet other requirements)
  • Relaxed time-in-business and revenue requirements if your credit is 650+
  • Lends to businesses in the marijuana industry (with 1+ year in business)

Cons

  • Rates can be high

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.

National Business Capital Eligibility Requirements

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.

Why We Chose National Business Capital

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. “Green” businesses, take note!

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2. Lendio: Best Equipment Financing Loans For Startups With Bad Credit

Lendio

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Pros

  • Saves time by sending your application to multiple lenders at once
  • Helps you figure out which financing product is best for your needs
  • Lets you compare different loan offers so you can choose the best one

Cons

  • Not all lenders in Lendio’s network accept bad-credit applicants

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, but it can often 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'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.

Lendio Eligibility Requirements

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.

Why We Chose Lendio

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.

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3. BusinessLoans.com: Best Bad Credit Startup Loans For Borrower Support

BusinessLoans.com

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Pros

  • Saves time by sending your application to multiple lenders at once
  • Great support & guidance for borrowers
  • Quick & easy application process

Cons

  • Funds can take a while to disburse
  • Not all lenders in BusinessLoans.com’s network accept applicants ith bad credit

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.

BusinessLoans.com Eligibility Requirements

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.

Why We Chose BusinessLoans.com

BusinessLoans.com is a new player on the lending marketplace scene, but the company 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 need (or prefer) individualized assistance, BusinessLoans.com representatives are there to help.

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4. Fundbox: Best Bad Credit Short-Term Loans For Startups

Fundbox

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Pros

  • Simple application
  • Next-day funding
  • No draw fee, prepayment fee, origination fee, or maintenance fees

Cons

  • Doesn’t accept very poor credit or brand-new businesses

Fundbox has a convenient lending product for newer businesses with subprime credit: revolving lines of credit. 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.

Fundbox Eligibility

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.

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.

Why We Chose Fundbox

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.

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5. Upstart: Best Easy Approval Startup Business Loans For No Credit History

Upstart

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Pros

  • No time-in-business or business income requirement
  • Builds personal credit
  • Considers applicants with no credit

Cons

  • The origination fee is taken off the top of the loan

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. Read our guide to using personal loans for business for more details on this common practice.

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 6.5%-35.99%.

Upstart Eligibility Requirements

Upstart’s minimum credit score is just 600 (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.

Why We Chose Upstart

If you don’t have any credit history, Upstart may nonetheless be able to find you a loan product for which you can qualify. What’s more, any startup owner looking to finance a small business with a personal loan could do a lot worse than seeking an Upstart loan.

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6. Credibly: Best Merchant Cash Advances For Startups With Bad Credit

Credibly

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Pros

  • Can borrow up to $400K
  • Will accept very poor credit
  • Transparent rates and fees

Cons

  • High revenue requirements

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!

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 Eligibility Requirements

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, 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.

Why We Chose Credibly

While 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.

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7. Kiva: Best Crowdfunding For Startups With Bad Credit

Kiva U.S.

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Pros

  • No credit check
  • No interest or fees
  • Flexible repayment plans

Cons

  • $1,000 limit on startup loans
  • You’ll need to conduct a successful crowdfunding campaign

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.

Kiva U.S. Eligibility Requirements

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 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.

Why We Chose Kiva U.S.

Kiva says 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.

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How To Get A Startup Loan With Bad Credit

Even if you have bad credit, you can still qualify for a startup small business loan.

First, evaluate and compare different lenders that cater to new business owners who have bad credit. Generally, you should be able to find a startup loan as long as you’ve been in business for at least a few months and your credit score is at least 500. You’ll also need to show that you have sufficient income (personal or business, depending on the lender’s requirements) to repay the loan.

Once you find a loan that appeals to you (and for which you’re eligible), it’s easy to apply online. If you meet the minimum criteria and are “pre-approved,” the lender will reach out and ask for more information for the underwriting process. Once you return the requested information, you will hopefully receive a “hard” approval and a loan offer. With most online lenders, you’ll receive your funds as soon as 24 hours to a few days after accepting the offer.

Check out our step-by-step breakdown of the startup loan application process for more details.

Bad Credit Startup Loan Application Tips

With a few exceptions, the application process for these startup loans is quick, painless, and entirely online. However, startup business loans for borrowers with bad credit are never guaranteed. To increase your chances of startup business loan approval, here are a few tips for applying:

  • Don’t waste your time applying for startup loans when you don’t meet the minimum qualifications
  • When you do qualify, apply for multiple loans and then compare your offers to choose the best one (there’s no credit risk in getting pre-approved, as this usually only requires a “soft” credit check)

If you check out some loan or credit card options and are not pleased with the offers you’re getting, you might consider:

For more business funding alternatives for bad credit, see our full list of options below.

Alternative Startup Funding For Bad Credit Borrowers

If you don’t qualify for small business loans, alternative funding types have more flexible credit score requirements. Consider the following alternatives to startup business loans for bad credit:

Small Business Credit Cards

If you aren’t yet ready for a business loan, a small business credit card for bad credit can be a good way to cover startup expenses while building your credit. Business credit cards are also an effective way to establish a business credit history and separate your personal credit history from your business credit history.

Corporate Cards

For new businesses registered as corporations, a corporate card is another type of business credit card that can be used to pay for business expenses. Since you are applying as a corporation, the card issuer will not check your personal credit. The caveat is you will need a high balance in your corporate bank account. For example, Amex’s corporate card program for startups requires a minimum $1 million bank account balance.

Small Business Grants

Business grants do not need to be repaid, and no credit check is involved. Various organizations, local governments, and private companies offer small business grants, including startup business grants. However, your company will usually need to meet certain criteria to qualify. For example, some grants require that your business be woman-owned or be operating in a specific city and/or industry.

Crowdfunding

In addition to crowdfunded loans, such as Kiva, other crowdfunding platforms for businesses do not require any repayment (or credit check). Depending on how the service is structured, businesses may need to offer equity in their company or provide backers with a reward related to the project for which they are soliciting funds.

FAQs About Startup Small Business Loans With Bad Credit

Can I get an easy approval startup business loan if I have bad credit?

Some online and nonprofit lenders serve new business owners with bad credit, but loans for borrowers with bad credit tend to carry higher interest and have shorter repayment terms compared to traditional business loans. If you lack strong business credentials, it may also be difficult for you to get a loan larger than a microloan ($50K and smaller).

Can I get a startup business loan with no credit check?

Almost every lender will at least perform a soft pull of your credit to get an idea of where you stand in terms of credit. Conventional lenders like banks will likely always require a credit check, but there are a few lenders that don’t require a credit check.

Do I need collateral to get a bad credit startup loan?

Bad credit startup loans usually don’t require you to put up any specific collateral or business assets. However, most online startup loans require a UCC-1 blanket lien and/or a personal guarantee.

Can I get an SBA loan with bad credit?

You usually need to have at least fair credit to get an SBA loan. The SBA has different credit score requirements for different loans, but the minimums tend to be in the 600s. For example, the SBA 7(a) loan requires a score of 640, while an SBA Microloan has a minimum of 620.

What is the minimum credit score for the SBA?

The SBA Microloans program has the lowest credit score requirement. These loans have a minimum credit score requirement between 620 and 640 and require collateral.

Which loan company is best for bad credit business loans?

A couple of the best lenders for bad credit (credit scores less than 600) are Upstart, BusinessLoans.com, and Credibly.

Can I get an easy approval business loan with a 500 credit score?

It is difficult but possible to get a business loan with a 500 credit score. While you may find funding with a 500 credit score, it may not come in the form of a traditional loan. Merchant cash advances, accounts receivable factoring, and short-term loans often have lower credit score requirements than ordinary installment loans.

How can I start a small business with no money and bad credit?

There are a number of different tactics you can take to start a business when you have no money and bad credit. This includes adopting a business strategy with very low overhead or tapping non-traditional sources of financing. Learn more about how to start a small business with no money.

Can I get credit for my business with bad credit?

Yes, there are credit options for businesses with bad credit. These typically offset the risk of a bad credit score by looking at revenue, available assets that can be tapped for liquidity or used as collateral, and/or high interest rates.

Can I get startup business loans with no revenue?

There are a few lenders, including the “crowdlending” nonprofit Kiva U.S., that offer loans with no revenue requirements whatsoever. However, most startup business loans will carry some degree of revenue requirement. Some lenders offer equipment financing loans to businesses with no revenue yet, however.

In Summary: 7 Best Startup Business Loans For Bad Credit

  1. National Business Capital:
    • Best Startup Loan For Flexible Borrower Requirements
    • Minimum Credit Score: 580
    • Minimum Revenue: $10,000/month
  2. Lendio:
    • Best Equipment Financing Loans For Startups With Bad Credit
    • Minimum Credit Score: N/A
    • Revenue: N/A
  3. BusinessLoans.com:
    • Best Bad Credit Startup Loans For Borrower Support
    • Minimum Credit Score: N/A
    • Revenue: N/A
  4. Fundbox:
    • Best Short-Term Loans For Startups
    • Minimum Credit Score: 600
    • Revenue: $100K/year
  5. Upstart:
    • Best Easy Approval Loans For No Credit
    • Minimum Credit Score: 600
    • Revenue: N/A
  6. Credibly:
    • Best Merchant Cash Advance For Startups
    • Minimum Credit Score: 500
    • Revenue: $15K/month
  7. Kiva U.S.:
    • Best Crowdfunding For Startups
    • Minimum Credit Score: N/A
    • Revenue: N/A
Jason Vissers

Jason Vissers

Expert Analyst & Reviewer at Merchant Maverick
Jason has been writing about small business software platforms, services, and financing since 2015. Jason’s expertise has been featured in Yahoo Finance, Time/NextAdvisor, Home Business Magazine, CreditCards.com, GoBankingRates, TheLadders.com, and other publications. He has a bachelor’s degree in Political Science from San Diego State University and currently lives in Philadelphia, Pennsylvania.
Jason Vissers
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