Easy Small Business Loans for Bad Credit

By Kieran Daly, 10 January, 2023

Easy Small Business Loans for Bad Credit

Bad personal credit is a reality many people face, it can make getting loans and other financing options more challenging. But what about small business loans? Does having a low credit score affect your ability to get financing for your business? Business loan requirements vary between lenders, but there are options available for financing even if you have bad credit.

Can You Get a Small Business Loan with Bad Credit?

Yes, you can get a loan or business financing, even with bad credit. You will likely have more luck looking for a lender that accepts bad credit scores, rather than applying for loans with the best terms. In general, business loans for bad credit will have higher interest rates, because lenders consider them to be at a higher risk of not being paid back. 

Shopping around for several different lender options that will approve your financing with a low credit score can help you find the best option for your needs. As you pay off your business loan or improve your personal credit score, you may be able to renegotiate the terms of your loan. 

What Is the Minimum Credit Score for a Small Business Loan?

There are lenders that have a business loan credit score requirement as low as 500, but they can be hard to come by. For FICO credit scores of 500-670 (considered “bad credit”), many standard banks and credit unions are unlikely to approve a business loan. Online lenders and some specific non-profit organizations designed to help disadvantaged small business owners are likely to be the best options.

Can I Get a Business Loan with a 550 Credit Score?

Yes, you can get a business loan with a 550 credit score, but especially at these lower ends of the bad credit range, it can be a challenge. In some cases working with a cosigner or providing extra collateral may help your eligibility. Credit scores of 600+ will open more options, including online lenders like Backd

What Is the Easiest Loan to Get Approved for with Bad Credit?

Here’s a list of the easiest business financing options if you have bad credit. 

  • SBA Loans - Because the Small Business Administration (SBA) is a government program designed to help small businesses access funds through approved lenders, SBA loans can have fewer requirements for eligibility. According to the SBA, “even those with bad credit may qualify for startup funding.” 

  • Guarantor Loans - These loans involve having someone else guarantee your loan, meaning they will pay back the loan if you default. If you have a poor credit score and a family member or friend willing to be your guarantor, this can be a great option.

  • Equipment Loans - If you need a loan specifically to invest in equipment for your business, this type of loan often has fewer requirements and better terms since the equipment itself is used as collateral.

  • Online Lenders - Although not a loan from a traditional bank, online lending platforms like Backd are becoming more popular. Generally, these financing options have more flexible eligibility requirements for credit scores.

  • Business Credit Card - For very short-term financing, charging company expenses to a business credit card may be an option. In some cases, interest rates on credit card purchases may be lower than other available credit sources if you have bad credit. It is always important to make at least minimum payments on credit cards to avoid expensive fees.

  • Crowdfunding - Some small businesses use crowdfunding sites, like Kickstarter or Indiegogo. These allow businesses to collect money from supporters first, then invest in their business before needing to deliver their product.

Backd: The Easiest Way to Fund Your Business

Even with the best business idea, it can be a challenge to get the funding you need to bring it to life. That’s why Backd simplified the lending process, so you can get the money you need to make your business work without the headache–even if you have less-than-perfect credit. Backd is able to approve financing with credit scores of 600+ and customize an option to work best for your business.

Backd offers working capital financing from $10K-$2M, with term lengths up to 16 months and automatic payments. Backd also has a business line of credit options that provide quick access to revolving credit that can be used for any business need.

Our eligibility requirements are just that you have:

  • Been in business for at least one year

  • A FICO score of 600+

  • An annual revenue of at least $300K

  • A U.S.-based business with a brick-and-mortar address

  • A business bank account

Start an application today and get the funds you need fast!