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Small Business Loans for Bad Credit in the USA

Business loans are integral for survival and growth, but bad credit can impact your ability to access funding. Learn how and where to get small business loans for bad credit.

One of the major challenges of running a small business is figuring out how to raise funds to overcome challenges, improve operations, and scale your business. Most small business owners rely on loans from traditional banks or private lenders to raise funds.

However, getting a loan requires businesses to meet specific requirements, including a good credit score. Unfortunately, some small businesses have bad credit scores, which makes it difficult to access funding.

Bad credit simply means a low credit score. Credit scores are ranked from 300 (low) to 850 (high). Anything below 580 makes it difficult to get financial loans for small businesses. In the US, about 73% of small business owners find it challenging to get loans from banks because lines of credit have tightened.

The good news is there are loan options for businesses with bad credit. With bad credit business loans, you can secure enough funding to finance a start-up, fund everyday operations, buy equipment, and fund expansion plans. However, quick loans for bad credit come with drawbacks: higher interest rates and increased administration fees charged by lenders are some disadvantages.

Two business women discussing a financial graph

As a business owner, improving your company credit score is the best way to ensure you secure loans under favorable conditions. You can boost your business credit score by:

  • Paying your bills on time.
  • Keeping your credit utilization ratio down.
  • Reduce or outrightly stop applying for new lines of credit, and if you must, let it be a secured credit card.
  • Keep your old credit accounts open even after clearing your debts because they show your credit history.

How to get bad credit business loans

A desk with American dollars, financial documents and a laptop

Although their process may differ slightly, most financial institutions have similar requirements for loan applications. That being said, securing business loans for poor credit can be more tedious, and there are more hoops to jump through. Here are steps to follow to give you a greater chance of approval:

Check your business and personal credit scores. Request your credit report before applying for a loan. Knowing the content of the credit report will help you understand how lenders assess your loan application. You can check your credit score through platforms like Experian, Equifax or Dun & Bradstreet (D&B).

Improve your credit scores. If possible, invest in boosting your credit score before researching lenders. You can begin by examining your credit report and disputing any discrepancies that negatively affect your score. Also, if you do not have a credit history, open a credit account and make payments regularly.

Get your documents in order. You'll go through a vetting process known as due diligence. This is where lenders review your business and personal bank statements, business plan, and other financial documents. So, prepare your documents and make sure there are no discrepancies before applying.

Find possible co-signers: A co-signer is an individual who consents to pay back the loan if the primary borrower defaults. So finding a co-signer with a high credit score can help increase your approval odds or get better loan terms. However, not all lenders accept co-signers.

Compare lenders to find the best deal. Since your low credit score already puts you at a disadvantage, it makes sense to research more than one lender. This way, you can save money by comparing repayment terms, loan amounts, and rates offered by different lenders.

Where to find small business loans for poor credit in the US

A couple applying for a start-up loan


Kiva makes available loans between $1,000 - $10,000 for small businesses with zero interest through a crowdfunding system. To qualify for a loan, you must be over 18 years old, and your company must be US-based.

Kiva’s less rigid application process doesn’t mean their loans can be used to serve just any purpose. It's an important part of their requirements that the loans are for business use only. The repayment term is between six months to three years.

Kiva will review your application to ensure you and your business are not going bankrupt, in foreclosure, under any claims or involved in illegal activities. Kiva allows you to start a 15-day private fundraising period immediately after your loan is approved. Then an additional 30-day public fundraising period begins after you finish the private funding period.


Biz2credit provides loan options for small businesses ranging from $25,000 to $6 million. Your business should have an annual revenue of at least $250,000 and must have been operating for at least six months.

If your application is successful, you will get approval within 24 hours and receive funding within three days. Their repayment term is weekly, bimonthly, or monthly.

Rapid Finance

Rapid Finance presents more flexible financing answers for your business. You can get small business loans ranging from $5,000 to $1 million.

Business owners with bad credit can complete an application with the necessary identification and income verification items on their website.

Rapid Finance business advisors will review the application to see if your business qualifies for the loan. After your application has been approved, you can be funded within 24 hours. Their repayment plan allows weekly and automatic payments.


Credibly provides loan options for small businesses with bad credit scores. Their small business loans range from $5,000 to $400,000.

To qualify for their loans, you must have been in operation for six months or more with at least an average monthly revenue of $15,000.

They include rates as low as 1.11% in their APR. The loan repayment terms are 6 to 18 months; however, they expect daily or weekly payments. Your application can get approved in hours, and you'll get funding within 24 hours after approval.

Loan Builder

Loan Builder is a PayPal offshoot backed by WebBank that lends short-term loans to small businesses. Their requirements for qualifying include your business's annual revenue and trading time.

Their expectation for the annual revenue is low compared to other lenders. However, they have a longer list of legal businesses they won’t support, including non-profits and attorneys. Also, they do not give out huge funds, so if you are undertaking a large project, you might want to try other lenders.

Instead of an APR fee, Loan Builder operates a one-time single fixed fee system based on a percentage of your loan amount and spread across the loan term.

You could be funded within 24 hours after your application has been approved. Their repayment plan is fixed and involves automatically collecting weekly payments from your bank account.

SBG Funding

Smart Business Growth (SBG) Funding provides business financing for small businesses up to $5 million. They require an annual revenue of at least $250,000 and an operational period of six months or more.

During the application process, SBG Funding asks for several documents, such as a copy of one’s driver’s license, the business’s bank statement for the last three months, a voided check, and other documents.

If SBG Funding approves your application, you will receive a response within 24 hours and your funds within days. Their repayment plan accommodates biweekly or monthly payment options with no prepayment penalties, and their rates start at 1.75% per month.

A business women looking at financial documents


Can you get a business loan with bad credit?

Yes, you can. However, these loans usually have higher interest rates, administration fees, shorter loan terms and steep penalties for defaulting repayments.

How fast can I get a loan for bad credit?

Lending platforms have different timelines for loan approval. Some can be as fast as 24hrs while others can take days or weeks.

What can I do if my business has bad credit?

You can improve your business's bad credit by taking the following steps:

  • Paying your bills on time.
  • Keep your credit utilization ratio down.
  • Don't apply for new credit lines (unless absolutely necessary).
  • Leave your old credit accounts open.

What is the easiest loan to get?

The easiest loans to get come from alternative lenders who don’t conduct credit checks and have minimal qualification requirements. However, they can be costly to pay off because of the higher interest rates and administration fees.

Can I get a start-up business loan with bad credit?

Bad credit makes it very difficult to get start-up business loans. The most suitable option for a start-up with a low credit score is family and friends, or crowdfunding.

The bottom line: loans for bad credit 

Bad credit shouldn't stop you from getting the financial help your business needs. There are accessible lenders who will provide you with a business loan despite having bad credit, but it’s important to prepare your documents and proposals.

Bad credit business funding gives you the opportunity to enhance business operations or scale your business like you've always wanted to, but you’ll need to be prepared to pay high interest rates.

If you want loans with more favorable conditions, your main aim should be improving your credit score. Once your credit score has improved, you can read our business finance guide to learn more about different loan options in the US.

Megan Kelly

About the author

Megan is Head of Content Marketing at She is an expert copywriter and content marketer.