Are you having trouble getting a small business loan or line of credit? Bad credit can make it difficult to get a small business loan. It is possible. There are many alternative lenders that can provide funding options for people with poor credit histories.
Lenders often refuse to lend money to small business funding with bad credit. This is because poor credit scores indicate that you have not managed your finances well in the past.
The good news is that non-traditional loans and alternative lenders are becoming more popular. For example, alternative lenders may not be concerned about your poor credit history. Alternative lenders may not rely on your poor credit history as much as traditional lenders. They instead focus on your operating history. This includes your business’s strength. They will consider revenue, potential, and other operational parameters when you apply for a small business loan and starting a small business with a bad credit score.
Also read: How does Financial Management Help Startups Survive
Here to Get Small Business Loans for Bad Credit
You have bad credit and need to look at your options. Below is a list of 15 finance companies that can help small business owners with bad credit find financing solutions.
1. Kabbage
Kabbage’s best feature is the fact that you don’t need a minimum credit score in order to be eligible. This is a huge advantage over other lenders. However, it does not check your credit history. Kabbage is worth a try if you need short-term working capital. A line of credit can be borrowed and repaid as needed.
You must have at least $50,000 in annual revenue and be in business for at most one year to qualify. A business checking account, bookkeeping software, or online payment platform are required. Loan terms of up to six months to 18 months are possible. There is no origination fee.
The online application takes only a few minutes. If approved, you will receive business credit within a few days.
2. Fundbox
Fundbox calls itself an invoice factoring company. The company offers term loans ranging from $1,000 to $100,000. You can check the Fundbox review and these loans can be paid in equal weekly installments over a 12- to 24-week period. It advances 100% of the invoice, unlike other factoring options. It then charges a reasonable interest rate starting at 4.66%. It waives interest on early repayments and does not charge origination fees.
The basic requirements for a company are flexible and welcoming to both new businesses and people with poor credit. The minimum FICO credit score for a business is 500. Although you can operate your business for less than one year, the minimum revenue must be at least $50,000 per year. Fundbox will also consider the number of your invoices as well as the ability to repay the loan.
Funding is quick and takes only three business days. To be eligible, you will need to use either bookkeeping software or online accounting which can link to Fundbox. These software programs must have at least six months of activity.
3. OnDeck
OnDeck offers both term loans and lines of business credit. If you need quick cash to grow your business, the term loan is an option. A line of credit is the best way to manage your cash flow.
OnDeck’s term loans require that you have a personal credit score of at least 500. Your personal credit score must be at least 600 to qualify for a line credit. A line of credit is only available to those who have been in business for at least one year and have an annual income of at least $100,000
Borrowing amounts equal 20% of your annual gross earnings. This amount is between $5,0000 and $250,000. The loan terms are fixed-rate and self-amortizing. They can be extended for six to 24 month periods. OnDeck charges a 2.5% to 4.0% origination fee for new loans.
After you submit the online application, you will receive a decision in a matter of minutes. You can get funding or business credit as quickly as the next day.
OnDeck records your payment activity to all three credit bureaus. This means that paying your small business loan on time can improve your credit score. This makes you more attractive to other lenders.
4. BlueVine
BlueVine may be a good option if you have poor credit, are unable to secure collateral, and have not paid invoices. Lenders offer an advance based upon the invoices’ value. It considers the financial strength of your creditors, not your business credit. It also decides whether your cash flow is strong enough to be approved.
To be eligible, you must have a personal credit score greater than 530. You must also have at least $120,000 annually in revenue. You must also have been in business for at least six months.
There are many financing options available to the company. These include term loans, invoice factoring, and line of credit. The amount of the loan can be borrowed from $5,000 to $250,000. The loan terms are fixed-rate, and the monthly payments are made over six to twelve months. There is no origination fee.
5. StreetShares
StreetShares is a great option for veterans who have a small business. StreetShares is veteran-owned. StreetShares’ motto is “Bringing trusted digital finance to America’s heroes”.
The member-based business offers contract financing, line of credit options, term loans, and line of credit options. Borrowers must have been in business for at least one year to be eligible. The annual income must be at least $25,000 A minimum credit score of 600 is required. To be eligible, your business must have a steady cash flow.
Borrowing amounts can range from $2,000 up to $250,000. The loan terms range from three to 36 months. The origination fee charged by the company is between 3.95% and 4.95%.
6. Dealstruck
Dealstruck is another option if you are looking for different loan products. The lender can provide a term loan to expand your business. The lender also offers an asset-based credit line of credit to businesses that have unpaid invoices. For companies with recurring inventory purchases, an inventory line is available.
You must have a minimum credit score of 600 to be eligible. Ethan Senturia, the CEO of the company, stated that credit scores up to 500 are acceptable. A minimum of $150,000 annual revenue is also required. You must also be in business for at least one year.
Borrowing amounts range from $25,000 to $250,000. The loan term ranges from one to four years. The origination fee charged by the company is between 2.99% and 5.99%.
Also read: How to Negotiate A Lender for Lower Interest Rate
7. Accion
Accion is a loan provider that may suit you if your business is starting up and you have poor credit.
The company offers loans to purchase inventory. The company also offers to fund for purchasing or leasing inventory, hiring employees, and other business expenses. To qualify, start-ups will need to have a business plan that includes a 12-month cash flow projection. A minimum personal credit score must be 575 for business owners. They must also be current with all bills and debts.
Accion doesn’t require that you be in business for a certain amount of time. Accion does not require that the annual income be sufficient to repay the loan. The amount of the loan can vary widely. They can range from $300 to $1,000,000. Loan terms vary too. The company also charges an origination fee between 3% and 5%.
8. Can Capital
Can Capital offer small business loans to bad credit companies and merchant cash advances starting at $2,500 up to $250,000? The loans can be used to provide working capital. They have a relatively short repayment term — 6 to 18 months.
The company promotes quick turnaround times to approve business credit. Once approved, approval can be made in as little as one day. Eligibility for funding is not determined solely by credit score, but also on the business performance.
Business owners must have been in business for at least six months to be eligible. They must have gross revenue of $150,000 or greater. They must also have less than $175,000 worth of outstanding tax liens and judgments. They also must not have been in bankruptcy for more than one year. Borrowing amounts range from $2,500 to $200,000. The loan terms are fixed-rate, and there is an origination fee of 3%.
9. Credibly
Credibly offers different business loan financing options. These include working capital loans, short-term (3-18 months), and business expansion loans. Merchant cash advances may also be available. The terms are between 18 and 24 months. Borrowers may be eligible for up to $400,000.
Credibly employs a proprietary algorithm for determining business owners. At least six months must be between the company’s inception and its current status. They should have at least $15,000 per month in bank deposits. To be eligible, they must also have a stable monthly income. The minimum FICO score for borrowers must be 500. The origination fee is 2.5%.
Within 24 hours, applications can be approved. Borrowers will be able to receive funds within the next business day.
10. Lendio
Lendio is different from the other alternative lenders. It is not a lender, but a lending platform. Lendio matches your application for a loan with other lenders. These lenders include some of those on this list. There are three types of loans: term business loans, merchant cash advances, and business line-of-credit.
You must have a personal credit score above 550 to be eligible. A minimum annual income of $50,000 is also required. Also, you must have been in business for at least six months. Lendio can match you with multiple lenders. You can choose between the lowest rate or the largest loan amount. This allows you to find the right fit for you.
Borrowing amounts range from $1,000 to $500,000. The terms for business loans range from $1,000 to $500,000. Origination fees and terms will vary depending on the lender.
11. Upstart
Upstart was founded by former Google employees. The lender offers consumer loans with fixed terms to qualified borrowers, but it is geared towards young adults. Artificial intelligence is used to make financial decisions. Lending decisions are influenced by credit scores. Those with poor credit histories or none can still get financing. Underwriting also considers qualifications, work experience, and education.
Upstart does not technically offer business loans. Borrowers may use the funds for any reason they choose. This site is focused on activities like reducing credit card debt or providing funds for education. The site also offers information on how to pay for personal finance.
Upstart is not a lender to businesses. Loans are available to anyone who is not a business owner or has a specified annual income. However, borrowers must have a minimum FICO credit score (at least 620) The loan terms range from three to five years, and the origination fees are 0% to 8.
12. Fundation
Fundation is a lender for businesses that provides fixed-rate, conventional business loans and a line credit. This company is a leader in alternative funding. It’s very affordable terms and fees are the reason.
Business owners must be in business for at least one year to qualify. The business must have at most three employees, including the owner. A minimum annual gross income of $100,000 is required for the business. A minimum credit score of at least 660 is required.
Borrowing amounts range from $20,000 to $500,000. The loan terms are one to four years. There is also a 5% origination charge.
13. LoanBuilder
In 2006, PayPal bought Swift Financial and created LoanBuilder. It offers short-term business loans for small business owners.
LoanBuilder uses a Business Health Credit Score. It uses the answers of the applicants to the “Configurator” online questionnaire to calculate credit scores. It looks for companies that have a score of 55 and more, according to Working Capital. This score is calculated using a number of credit factors.
Businesses must have been in business for at least one year, and have a minimum of $100,000 annually in annual revenue. Fixed-rate loans for business can be obtained by borrowers up to $500,000 These loans must be repaid within a period of three to twelve months. LoanBuilder charges no origination fee. Funds can be deposited as quickly as one day.
Also read: 7 Simple Steps To Getting A Business Loan
14. SmartBiz
According to its website, SmartBiz “streamlines SBA loans.” Like Lendio, it is a lending matchmaker. It matches you with the best lenders based on your requirements when you submit an application. There are many options available, including borrowing money, refinancing, and purchasing commercial real property. It has a solid track record of success in lending. According to the company, 90% of all applications that are submitted to banks are funded.
SmartBiz matches borrowers to two types of loans: SBA or bank term. SBA loan interest rates range between 4.75% to 7%. The loan amounts can range from $30,000 to $5 Million, with repayment terms ranging between 10 and 25 years. Higher interest rates (7.99% to 24.99%) are available for bank term loans. These loans also have smaller loan amounts (from $300,00 to $500,000.) and shorter terms (from 2 to 5 years). SmartBiz has a network of lenders that can help you if neither of these options is right for your needs. They can also offer financing options.
Two years of business experience is required. The borrower must be a U.S.-based business. It must also be owned by a U.S. citizen, a Lawful Permanent Resident, or a U.S. citizen. A borrower must be at least 21 and have a credit score of at least 640.
15. National Funding
National Funding is upfront with its declaration. It offers small business loans for bad credit. It offers high approval rates. The company offers quick funding, minimal paperwork, and renewal sources for capital.
National Funding provides a range of loan types. These include equipment financing, working capital, credit card processing, merchant cash advance, and merchant cash advance. It serves many industries. It also welcomes new borrowers.
National Funding charges a 2.2% origination fee for a business loan for bad credit. You will also need a business bank account with at least $1,500 in balance, and a minimum of $3,500. Additional requirements for business include a personal guarantee by the primary borrower. A bankruptcy must not have occurred in the last year. A minimum credit score of 600 is required.
Don’t Let Bad Credit Stop You
Bad credit scores can cause delays and additional work when trying to obtain a loan for your business or a line of credit from lenders. You shouldn’t let your bad credit score stop anyone from exploring other options. Some lenders will lend loans even to those with poor credit or business credit. Compare options, understand your needs, and look for the right one.
Do everything possible to improve your credit score. Make sure you pay your bills on time. To negotiate more favorable payment terms, speak to your creditors. Revolving credit should be kept at a low balance. To monitor for any changes in your credit score, you should regularly check it. You can also dispute errors in your credit report.
Bad credit should not stop you from achieving your business goals. You can grow your business by staying focused and staying focused.
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