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Yes, it is possible to get a small business loan even if you have bad credit. This is because your credit score doesn’t matter as much as the overall financial health of your business. Many lenders require a minimum credit score of 500, at least six months in business, and more than $30,000 in annual revenue. However, you can expect to pay higher fees and interest rates when you have bad credit as a business owner.
We reviewed 19 different small business loan lenders to determine the best small business loans for bad credit. Loan terms and rates should be reasonable, so these were important considerations in our assessments. We also looked at real customer reviews, credit score requirements, and loan amounts available.
The Best Small Business Loans for Bad Credit of 2023
- Best Short-Term Loans: LoanBuilder-PayPal
- Best Line of Credit: Lendio
- Best for Repeat Loans: OnDeck
- Best for Long-Term Financing: Rapid Finance
- Best for High Revenue: Credibly
- Our Top Picks
- Rapid Finance
- See More (2)
Best Short-Term Loans : LoanBuilder-PayPal
- Minimum Credit Score: 580
- Processing Time: Next business day
- Terms Available: 13-52 weeks
We chose LoanBuilder-PayPal as the lender with the best short-term loans because it offers loan terms between 13 and 52 weeks. Your minimum credit score to receive a loan is 580; funding can happen as soon as the next business day.
580 minimum credit score
Loan terms between 13 and 52 weeks
Receive funds as soon as the next business day
Must have business revenue of $33,300 or more per year
No prepayment discounts
Borrowing fee due at payoff
PayPal is an online payment system now offering short-term small business loans called LoanBuilder. This loan is also known as a PayPal Business Loan—it’s the same. Lending is through WebBank, a member of the FDIC. Loan terms are a maximum of 52 weeks, and you only need a 580 credit score to qualify.
Your loan application can be completed online or on the phone in five to 10 minutes, and approval is instant. After approval, receive funding of $5,000 to $150,000 directly into your business bank account as soon as the next business day.
Both a blanket lien and a personal guarantee are required when taking out a loan. Automatic weekly repayments come directly out of your business bank account. While you can’t adjust the frequency of repayment, you can specify which day of the week your payments come out. Should a payment fail, there’s a $20 non-sufficient funds (NSF) fee.
If you make your payments regularly, you won’t pay any fees aside from a one-time borrowing fee, based on a percentage of the total loan amount—as opposed to a traditional APR. This means you won’t save any money by paying off the loan early.
Best Line of Credit : Lendio
- Minimum Credit Score: 560
- Processing Time: One to two weeks
- Terms Available: One to two years
If you need flexible financing, consider a small business line of credit with Lendio. This is the best line of credit option for small business owners with bad credit because you only need a 560 credit score, and you have no obligation to use all of your funds. Plus, you pay nothing for those unused funds. Many people consider a line of credit like a safety net—it’s there if you need it.
560 minimum credit score
Only pay interest on the funds you use
Application takes just 15 minutes
Must have $50,000 or more in annual revenue
Funding takes one to two weeks
Loan terms of only one to two years
Lendio is a small business lending marketplace launched in 2011 that matches businesses with 75+ different lenders to secure the funding they need. Because Lendio doesn’t originate the loan, you receive multiple offers and can pick the one that best matches your needs.
Line of credit applications take 15 minutes and are a great option for businesses at least six months of age with $50,000 in annual revenue. Business owners must have a credit score of 560 and be willing to wait up to two weeks to receive funding. Loan terms offered are one to two years.
With a line of credit, you can borrow against it as often as possible, provided you don’t go over your credit limit. Borrow between $1,000 and $500,000 with interest rates of 8% to 24%. Depending on the lender you go with, they may ask for a personal guarantee.
Your repayment amount and frequency depend on the final lender you choose. However, the longer you’ve been in business and the higher your credit score, the lower your payments will be.
Best for Repeat Loans : OnDeck
OnDeck is best for repeat loans because it allows you to apply for more money after paying back half of your original loan; it also accepts minimum credit scores of 625, and same-day funding is possible. As long as you’ve been in business for over a year, have a business bank account, and at least $100,000 in annual revenue, you can apply for a loan.
Apply for more money when you’ve paid back half of your original loan
Same-day funding is possible
625 minimum credit score
Very high interest rates
Requires daily or weekly repayment
State and industry loan availability limitations
Launched in 2006, OnDeck is a publicly traded small business lender that works online and by phone. You only need a minimum credit score of 625 which is less than what many providers allow. Plus, after loan approval, you can receive your funds as soon as the same day and can receive more money after paying down half your loan.
You can borrow anywhere from $5,000 to $250,000 and lines of credit from $6,000 to $100,000. The amount available to borrow depends on your business revenue.
Repayment terms for term loans are up to 24 months, and 12 months for a line of credit loan. On a term loan, once you’ve repaid half of the loan, you can apply for more money, and you won’t be charged any remaining interest on your existing loan. Unlike most lenders, repayments occur automatically either daily or weekly, depending on the business information you provide to OnDeck.
The minimum APR for both term loans and line of credit loans is 29.9% as of March 2023. Paying off the loan early may result in your remaining interest being waived. However, this prepayment benefit option will mean a higher APR. OnDeck will also take a blanket lien on all business assets and require a personal guarantee.
Best for Long-Term Financing : Rapid Finance
- Minimum Credit Score: Not considered
- Processing Time: Within hours
- Terms Available: Up to 60 months
With Rapid Finance, you can borrow up to $1 million, depending on your monthly revenue, and have loan terms of up to 60 months. This lender will look at the entire health of your business—not just your personal or business credit score—when determining if your business will qualify for funding. These reasons make it the best small business loan option for long-term financing with bad credit.
Loan terms up to 60 months
Looks at overall business health and not just a credit score
Funds available within hours after approval
Repayment details not available online
Interest rates not available online
Rapid Finance offers lending solutions to small and medium-sized businesses. Its site boasts excellent reviews and offers one of the longest business loan terms at 60 months (most lenders are two years or less). Plus, when you apply for a loan, you can often get approval and funding within hours.
Your business must be at least three to six months old to qualify for many of its small business loans. However, other loan types, such as most of its short-term loans, require at least two years in business. A blanket lien is required.
Rapid Finance advertises daily, weekly, or monthly payments, but the website offers few details beyond that. No interest rates are published online, so it is necessary to reach out to customer service for repayment details.
Best for High Revenue : Credibly
- Minimum Credit Score: 500
- Processing Time: As soon as same-day
- Terms Available: Up to 24 months
To qualify for a small business loan with Credibly, you must have revenue of at least $15,000 per month, funding is quick, and the minimum credit score is 500. That's what makes Credibly our pick as the best small business loan for businesses with high revenue.
500 minimum credit score
Available to businesses at least six months old
Offers up to $400,000 and funds as soon as the same day
Requires revenue of at least $15,000 per month
Daily or weekly repayment
Credibly is a lender that launched in 2010 and offers one of the lowest minimum credit scores (500) out of all lenders we looked at. Businesses must have monthly revenue of at least $15,000 and be in business for at least six months. You’ll also have higher fees than with other lenders.
Choose from several different types of small business loans:
- Working capital loan
- Business expansion loan
- Business line of credit
- SBA loan
- Merchant cash advance
- Equipment financing
- Invoice factoring
Depending on which Credibly loan product you choose, you can borrow up to $400,000 and have loan terms of up to 24 months.
Credibly charges a 2.5% origination fee in addition to your factor rate. This factor rate starts at 1.15. This means on a $10,000 loan with a factor rate of 1.15, you will pay a $1,500 fee, in addition to the 2.5% origination fee, on a $10,000 loan.
Small business loans help you expand operations, cover payroll, pay for supplies, and manage cash flow. When you have poor credit, finding a lender can be difficult, but there are many loan options available with credit scores as low as 500. Some lenders don’t even have a minimum score and, instead, look at overall business health.
We recommend PayPal if you want a short-term loan, because it offers terms as short as 13 weeks. Lendio is excellent if you need a line of credit, while OnDeck is useful if you expect to apply for more money later. Check out the other lenders on our list for other situations, like Credibly if you have high revenue or Rapid Finance if you need long-term financing.
Compare the Best Small Business Loans for Bad Credit
|Small Business Loan||Best For||Minimum Credit Score||Processing Time||Terms Available|
|LoanBuilder-PayPal||Best Short-Term Loans||580||Next business day||13-52 weeks|
|Lendio||Best Line of Credit||560||One to two weeks||One to two years|
|OnDeck||Best for Repeat Loans||625||Same-day||Up to 24 months|
|Rapid Finance||Best for Long-Term Financing||Not considered||Within hours||Up to 60 months|
|Credibly||Best for High Revenue||500||As soon as same-day||Up to 24 months|
Frequently Asked Questions
What Is a Personal Guarantee?
A personal guarantee means that the business owner assumes the business debt in the event the business is unable to repay it. This helps protect the lender in the event of default and also makes it easier for a business to qualify for a loan when they might not have it without a personal guarantee.
What is the minimum credit score for an SBA loan?
The Small Business Association (SBA) does not specify a minimum credit score required to secure an SBA loan. However, SBA loans are provided by lenders who may have minimum score requirements. Typically, this minimum is about 620. However, the higher your score, the more likely you are to receive approval.
Can you get a Business Loan With Bad Credit?
Yes, it’s possible to get a business loan with bad credit. Some lenders don’t have a minimum credit score and look at the business's overall health instead. However, you can expect to pay higher fees or have a higher APR if you have bad credit.
What Is the Easiest Business Loan to Get?
The easier business loan to get is one that is secured. This means the loan is backed by collateral, and the lender gets that collateral if the business owner defaults on the loan. The collateral pledged usually includes property, inventory, equipment, savings accounts, blanket liens, and personal guarantees.
We looked at 19 of the best small business loans available and narrowed it down to the six best options for bad credit based on several features and considerations. We considered rates, credit score requirements, loan amounts, and repayment terms. Reviews of customer service, sales, and ease of use weighed heavily into our decision—obtaining a small business loan should be a pleasant, stress-free experience for business owners.
LoanBuilder. "Why a LoanBuilder Loan?"
Lendio. "Frequently Asked Question," Select "When was Lendio founded?"
Lendio. "About Lendio."
Lendio. "Business Line of Credit."
OnDeck. "OnDeck's Top 10 FAQs: Answered."
OnDeck. "About Us."
OnDeck. "Short Term Loans for Small Business."
Rapid Finance. "Small Business Loans for All Your Business Needs."
Rapid Finance. "Small Business Loan Financing."
Credibly. "Fast Business Loans."
Credibly. "Fast Business Loans," Select "Merchant Cash Advance."
Credibly. "Contact Credibly."
Credibly. "Small Business Loans and Financing."
Credibly. "Working Capital Loans for Small Business."
Fed Small Business. "The Small Business Credit Survey, 2021 Report on Employer Firms," Page 22.