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The Best Small Business Loans for Bad Credit

Funding for Borrowers with Less-Than-Perfect Credit

By Kathy Haan

Updated October 21, 2022

Facts checked by Vikki Velasquez

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If you’re not able to establish credit, you can still get an unsecured small business loan. This is because your credit score isn’t as important to the overall financial condition of your business. Most lenders require a minimum rating of 500 points, at least six months in operation, and greater than $30,000 in annual revenue.

Small business loan products comprise:

Cash advance for merchants

Invoice factoring

Line of credit

Working capital

Expansion of business

Equipment financing

Small Business Administration (SBA) loans

It is possible to pay more fees and interest rates when you’re not credit-worthy as a business owner. If you are able to take out certain loan products, such as invoice factoring loan or a merchant cash advance These loans rely on future sales or on funds already invoiced but not yet received.

We reviewed 19 different small business loan lenders to identify the best option for people with poor credit. Rates and terms for loans must be reasonable, so these were key factors in our evaluations. We also examined actual customer reviews, credit score requirements, and loan amounts available.

The Most Effective Small Business Loans to help those with bad Credit for 2023

Overall Best: OnDeck

The best short-term loans: PayPal

Best Line of Credit: Lendio

Best for Long-Term Financing: Rapid Finance

Best for High Revenue Accurate

Best Small Business Loans for People with Bad Credit

Our Top Picks




Rapid Finance


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The Bottom Line

Compare Providers


What is a Personal Guarantee?

What Credit Score Do You Need for the SBA Loan?

Can I Get a Business Loan with Bad Credit?

What is the most simple business Loan you can get?


Best Overall OnDeck


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OnDeck is the best small-scale business loan lender for bad credit since it will accept minimum credits of 625 and same-day funding is possible. If you’ve been running your business for at least a year, have an account with a bank for business with at least $100,000 in annual income and you’re eligible for the loan.


625 minimum credit score

The possibility of funding on the same day is there.

Request more cash after you’ve paid back the half of your original loan


Very high interest rates

Requires daily or weekly repayment

Cannot lend to businesses that are located in Nevada, North Dakota, South Dakota, and in certain sectors.

In 2006, OnDeck was launched. OnDeck is a publicly traded small business lender that works on the internet and via phone. It is the most comprehensive small business lender for bad credit since to be eligible for a loan it is necessary to have a credit score of 625, which is less than what many providers allow. In addition, following loan being approved, you can receive your funds as soon as the next day, and will receive additional funds after paying down half the loan.

You can take out loans ranging between $5,000 to $250,000 and credit lines that range between $6,000 and $100,000. The amount you can borrow depends on your business income.

Repayment terms for term loans are as long as 24 months, and 12 months for a line of credit loan. If you’re using the other hand, with a term loan, once you’ve repaid half of the loan and you’re able to request more funds and you won’t be charged any remaining interest on the existing loan. Unlike most lenders, repayments occur automatically either daily or weekly, depending on the business information you give to OnDeck.

Minimum APRs for term loans as well as lines of credit loans is 29.9 percent as of January 2023. If you pay off the loan early could result in your remaining interest being removed. But, this benefit for prepayment choice will result in that you pay a higher interest rate. OnDeck also has the form of a general lien on all assets owned by the company and requires a personal guarantee.

Best Short-Term Loans PayPal


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We picked PayPal LoanBuilder as the lender with the best short-term loans because it offers loan durations ranging from 13 to 52 weeks. The minimum credit score needed to qualify for the loan is 580. the loan can be funded as early as the next business day.


580 minimum credit score

Terms of loans ranging from 13 to 52 weeks

Receive funds as soon as the next working day


The business must earn more than $33,300 annually.

No financial benefit for paying the loan off early as the full fee is due upon payoff

Startups are not available for this.

PayPal can be described as an online payments platform that is providing short-term small-business loans that are referred to as LoanBuilder. The loan is also called a PayPal Business Loan. It’s the same. Lending is made through WebBank which is a member of the FDIC. WebBank is the most convenient short-term small business loan provider for people with poor credit since loan terms can be a maximal of 52 days, and you only need 580 points of credit to qualify.

Your loan application can be done online or on the phone in five to 10 minutes, and approval is instant. Once approved, you will receive funds from $5,000 to $150,000 directly into your bank account as soon as the next working day.

A blanket lien as well as personal guarantees are required to obtain an loan. The automatic weekly repayments are taken out of your business bank account. Although you aren’t able to alter the frequency of repayment however, you can choose which day of the week your payments are made. In the event of a failed payment it will result in a $20 fee for non-sufficient funds (NSF) fee.

If you pay your loan frequently, you will not have to have to pay any charges other than one-time fees for borrowing, based on a percentage of the total loan amount as opposed to a traditional APR. That means that you don’t make any savings when you pay off the loan in advance.

Best Line of Credit Lendio


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If you require flexible financing, consider an unsecured line of credit with Lendio. There is no obligation to use all of the funds, and you’ll not have to pay for funds that you don’t utilize. Many people think of the credit line as security nets – it’s there in case you’re in need of it.


Minimum credit score of 560

You must pay the interest only on amount you have used

Application takes just 15 minutes


You must have at least $50,000 in revenue per year

The process of funding can take anywhere from one to two weeks

Loan terms of only one to two years

Lendio is a small-business lending marketplace that was launched in 2011 . It connects businesses with over 75 different lenders to secure the funding they require. Since Lendio doesn’t provide the loan, you receive several offers and you can choose the one that’s most compatible with your needs. This is the best credit line for small-sized business owners with low credit scores because you only need a 560 credit score and there is no obligation to use all of your funds. Additionally, you do not pay any interest on the unused funds.

Line of Credit applications last fifteen minutes and can be a fantastic alternative for companies that are at minimum six months old with $50,000 in annual revenue. Business owners require an average rating of at least 560 and willing to wait for up to two weeks before receiving funding. The loan terms are from between one and two years.

With a line of credit you are able to borrow against it as often as possible provided you don’t go over the limit of your credit. Borrow between $1,000 and $500,000 with interest rates of 8% to 24%. Depending upon the loan provider you sign with, they might require an individual guarantee.

The amount of your repayment and the frequency are contingent on the lender you choose. But, the longer you’ve been in business and the higher you credit rating, the less your payments will be.

Ideal for long-term financing Rapid Finance

Rapid Finance

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With Rapid Finance, you can take out loans of up to $1 million, depending on your monthly revenue, and have loan terms that range from 60 months. The lender will take into consideration the entire performance of your company, not just your personal or business credit score when determining whether your business is eligible to receive funding.


The loan terms can be as long as 60 months

Looks at overall business health and not just a credit score

You can access funds within 24 hours of approval


Repayment details not available online

Rates on interest not accessible on the internet.

Rapid Finance is a sister business to Quicken Loans and offers lending solutions for medium and small enterprises. Its site boasts great reviews and has an industry-leading loan terms of 60-months (most lenders offer two years or less). These factors make it the ideal small-business loan option for long-term financing with poor credit. In addition the moment you make an application for the loan, you can often receive approval and funds within minutes.

To be eligible to receive to be eligible for a loan the business you are operating must be at least between three and six months in age for many of its small business loans. However, some loan kinds, like most of its short-term loans are required to have at least two years in operation. A blanket lien is required.

Rapid Finance advertises daily, monthly or weekly installments However, the website provides only a few additional details. The rates for interest are not posted online, therefore it’s necessary to reach out to the customer service department for information on repayments.

The best option for high-revenue credibility


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To be eligible for a small-business loan through Credibly, you must have an income of at least $15,000 per month. This makes it an ideal choice if you have revenue. Funding is quick, with a minimum credit score of 500.


A credit score minimum of 500 is required.

Business owners who are with a minimum of six months’ experience

Up to $400,000 in offers and cash as early as the next day


The minimum amount of revenue required is $15,000 per month

Repayments on a weekly or daily basis.

Credibly is a lender that was established in 2010 and provides some of the best minimum scores for credit (500) out of all the lenders we reviewed. The reason they are able to do this is the reason it is the most suitable choice for small-sized businesses that have large revenues. Businesses need to have a monthly revenue of at least $15,000 and be in business for at least 6 months. Additionally, you’ll pay higher fees that other lenders.

Select from a variety of different kinds of small business loans:

Working capital loan

Business expansion loan

Credit line for business

SBA loan

Merchant cash advance

Equipment financing

Invoice factoring

Based on the you choose to use the Credibly loan product you select You can take out loans up to $400,000 and enjoy loan terms of up 24-months.

The company charges you a 2.5 percentage origination fee, in addition to the factor rate. The factor rate begins at 1.15. If you take out a $10,000 loan at a rate factoring of 1.15 you’ll have to pay $1,500 in fees, in addition to the 2.5 percent origination cost, for the $10,000 loan.

The Bottom Line

Small business loans help you expand operations and cover payroll costs and other expenses, and manage cash flow. When you have poor credit, finding a lender isn’t easy, however there are plenty of loan options for those with credit scores of as small as 500. Some lenders don’t have minimum scores, but instead, they look at the overall health of your business.

We suggest OnDeck for your small business loan requirements if you have poor credit as it can provide same-day funding with a minimum credit score of 625. In addition, after repaying half of your loan you are able to apply for more money and you won’t be charged for any interest on the original loan.

Compare Providers

Small-scale Business Loan Gets The Most Important Benefit


Best Overall Same-day funding with a minimum credit score 625


Best Short-Term Loans Loan terms between 13 and 52 weeks


Best Line of Credit Only pay interest on the funds you use but you are not required to make use of it

Rapid Finance

The best option for financing long-termLoan terms up to 60 months, and quick financing


Ideal for high-revenue businessesA minimum credit score is 500 if you make $15,000 in monthly revenue

Frequently asked questions

What Is a Personal Guarantee?

A personal guarantee means that the business owner assumes the business’s debt in the event that the company is not able to pay it. This protects against default by the loaner and makes it simpler for a company to be eligible for a loan when they might not be able to without personal guarantees.

What is your credit score? need to get An SBA Loan?

It is important to note that the Small Business Association (SBA) does not have the minimum credit score needed for obtaining an SBA loan. But, SBA loans are provided by lenders who may have minimum score requirements. Typically, this minimum is about 620.1 However, the higher your score, the more likely you are to be approved.

Can I Get a Business Loan Even With Poor Credit?

Yes, you can take out an enterprise loan with bad credit. Some lenders don’t have the minimum credit score, and instead examine their overall financial health and the business instead. However, you can expect to pay more fees or have a higher interest rate when you have poor credit.

What’s the easiest business Loan to Get?

The easiest business loan to obtain is one that is secured. This means that the loan is secured by collateral, and the lender gets that collateral if the business owner defaults on the loan. The collateral pledged usually comprises inventory, property, equipment, savings accounts or blanket liens. It also includes personal guarantee.

How We Chose the most effective Small Business Loans for Bad Credit

We looked at 19 of the top small commercial loans available and we narrowed it down to the best six options for people with poor credit, with a focus on various aspects and factors. We looked at rates, credit score requirements, loan amounts, and the repayment terms. The reviews of customer service sales, customer service, and user-friendliness weighed heavily into our choice of getting an entrepreneur-friendly loan is supposed to be a pleasurable easy experience for business owners.

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