How to Get a Business Loan with Bad Credit in 2025

Discover the top strategies and lenders that work with poor credit business owners.

A low credit score doesn't have to be a dead end for business financing. While traditional banks typically require a 680+ credit score, a growing number of online lenders specialize in working with business owners who have credit scores as low as 500. Here's what you need to know.

Why Bad Credit Affects Business Loan Approval

Lenders use your personal credit score as a proxy for financial responsibility, especially for businesses under two years old with limited operating history. A score below 620 signals higher default risk, which means lenders either decline the application or charge higher interest rates to compensate.

Best Business Loan Options for Bad Credit

• Merchant Cash Advances — Based on daily sales, not credit score
• Invoice Financing — Use unpaid invoices as collateral
• Microloans — SBA microloans up to $50,000, flexible credit requirements
• Equipment Financing — Equipment serves as collateral, easier approval
• Business Credit Cards — Secured cards to build credit while funding operations

Top Lenders That Work with Bad Credit

Kabbage by American Express offers business lines of credit to companies with as little as one year of operating history and no stated minimum credit score. BlueVine offers lines of credit for businesses with 625+ credit scores and $40,000+ monthly revenue. Fundbox approves applications based primarily on business cash flow, not personal credit.

How to Improve Your Chances

1. 1Show strong monthly revenue — $10,000+/month significantly improves approval odds
2. 2Provide at least 3 months of business bank statements
3. 3Offer collateral if possible — equipment, inventory, or real estate
4. 4Get a co-signer with stronger credit
5. 5Apply to multiple lenders simultaneously to compare offers

Building Toward Better Rates

Bad credit business loans are a starting point, not a permanent situation. Use a smaller loan, repay it on time, and your options will expand significantly within 12–18 months. Many lenders report to business credit bureaus, helping you build a separate business credit profile.