Best 8 Bad Credit Business Loan Providers 2020

Check out our list of the 8 bad credit business loan providers in 2020.
Author: Edith Muthoni

Last Updated: May 11, 2020
Debt consolidation loans | Leanbonds
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Most lenders differ on the cut off point for what is considered a bad credit score, but the general feeling is that anything below 620 points on the FICO rating is BAD.

This tag then becomes an immovable obstacle when it comes to applying for business credit services. Banks especially have complicated the process by making it really hard – though not impossible – to access business loans when you have a bad credit score.

How to qualify for a bad credit loan | Learnbonds

Small and medium enterprises face the brunt of this issue as lenders consider not just their businesses cash flows and future earnings projection, but also the business owner’s credit score – most of which was bruised when they were bringing up the business.

Are there options for bad credit businesses looking to expand operations, you might ask? Yes, there are several non-banking financial services providers and innovative finance platforms willing to overlook the bad credit in assessing the creditworthiness of your business. You, however, have to contend to their relatively strict loan terms like higher interest on loans and relatively shorter repayment periods. Some will even demand that you secure loans with personal or business assets.

In this guide, we highlight some of the most reputable bad credit business loan providers with the highest probability of approving your business loan. But first, we look at why you need a business loan in the first place and the merits and demerits of opting for one.

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    Best bad credit business loan providers for 2020: Summary

    Reviewers Choice
    Credibility Capital Business
    Available Loan Amount
    $25,000 - $350,000
    Available Term Length
    1-3 years
    Representative APR
    Visit Now
    Available Loan Amount
    $1,000 - $500,000
    Available Term Length
    12-24 months
    Representative APR
    Visit Now
    Available Loan Amount
    $1,000 - $500,000
    Available Term Length
    12-36 months
    Representative APR
    Visit Now
    Available Loan Amount
    $1,000 - $350,000
    Available Term Length
    25 years
    Representative APR
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    Available Loan Amount
    $1,000 - $100,000
    Available Term Length
    12-24 weeks
    Representative APR
    Visit Now


    Note:  A bad credit score should no longer bar you from accessing crucial business loans necessary for expansion. Several innovative financial services providers have come up with more creditworthiness assessment metrics that take into account more than just your credit score.

    Why do you need a bad credit business loan?

    i. Funding business expansion:

    What happens when you want to expand the scope of your business and reach more viable markets but don’t have sufficient cash savings, and no bank wants to lend you cash because of your poor credit history? You turn to the alternative financial service providers there are ready to overlook the poor credit in advancing you cash.

    ii. Sort emergency repairs and upgrades:

    At times your business is hit with accidents or other time-sensitive catastrophes that require immediate redress. In such a case, you will need a business loan lender that not only promises to overlook your bad credit score but also offers the fastest turnaround in loan processing.

    iii. Sort emergency bills and dues:

    It doesn’t just have to be accidents and equipment failures that necessitate immediate cash needs. At other times it is sensitive bills and dues like electricity, water, or key suppliers that require immediate funding.

    What are the pros and cons of getting a bad credit business loan?


    • They come in handy in addressing time-sensitive business needs like equipment repairs
    • Most carry fixed interest rates and therefore have easily predictable monthly repayment installments
    • Helps build or rebuild your credit score
    • Most lenders have come up with different specialized loan products to suit varied business needs like equipment purchase or invoice factoring
    • Most have relatively fast application and approval processes


    • Most of these loans attract punitively high interest rates
    • There is a high likelihood of getting hooked up in a cyclical loop of relying on bad debts
    • Most lenders insist on collateral for the loan

    Criteria used to rank the different bad credit business loan providers:

    • Minimum/maximum loan limits
    • Interest rates and associated costs
    • The flexibility of the repayment periods
    • Credit score limit
    • Qualification requirements
    • Customer support
    • Loan processing time
    • Need for collateral

    Best bad credit business loan providers for 2020:

    Credibly Capital – up to $250,000 at 36% APR

    Credibly specializes in offering secured small business expansion and working capital loans. The established bad credit business loan provider tops our list not just because of its relatively attractive high loan limits of up to $250,000 but also because of their highly competitive interest rates that range from 9.99% to 36% p.a. The lender is also quite speedy with loan processing and promises to have the loan deposited into your bank account within 24 hours of loan approval. The loan application is wholly online and takes no more than ten minutes to fill their pre-qualification form. It is important to note that while Credibly is quite flexible when it comes to assessing your creditworthiness, they will only fund a business that has been inactive operation for over six months and deposited not less than $10,000 in the bank account in the last three months.

    Our Rating

    • Maintains some of fastest loan application processing and business funding
    • No loan application or closing fees
    • Has a straightforward online loan application process
    • The loans must be secured by a business or personal asset

    Lendio – up to $500,000 at 24% APR

    Lendio describes itself as a one-stop-shop for small business loans. It sets itself apart from the rest of the bad credit business loan providers in the sense that it is not a direct lender but a financing platform that works by connecting you with big-name bad credit business loan lenders. Here, you only have to fill a relatively straightforward application form with Lendio taking over the process of matching your business financing needs with a suitable lender. And while the platform doesn’t originate business loans they will match you with lenders who are willing to advance you between $1,000 and $500,000 even when you have a 550 credit score. You can expect to have the funds deposited into your account within 2 and 7 days after the loan application. You will then have between 12 and 24 months to repay the principal amounts and interests of between 8 and 24% p.a.

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    • Helps ease the process of matching your business needs with a suitable financier.
    • Stellar customer support.
    • Highly attractive maximum loan limits and lower credit score minimums.
    • Opaque loan pricing strategies.
    • Most of these loans have to be secured by business or personal assets.

    OnDeck – up to $500,000 at 49% APR

    If you have a less than perfect credit score of below 600 points, OnDeck will still advance you up to $500,000 to boost your small business operations. The interest rates and loan APRs are highly customized but they often average between 9% and 49%. You can apply for the business loan by filling the application form online that will then be processed and if approved, the funds will be disbursed to your account within three days. You then have between 12 and 36 months to repay the fixed interest and highly secured loan. Some of the minimum qualification requirements by the lender include the fact that your business must have been in operation for over one year, during which time it recorded revenues above $100,000. You must also be able to repay the 0-5% origination fee for the loan and commit to weekly loan repayments.

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    • Gives you access to higher loan limits.
    • Highly transparent and straightforward loan application process.
    • Charges competitive interest rates with no hidden.
    • Charges a loan origination fee that is paid upfront.
    • Requires that you commit to weekly loan repayment.

    Lendza – up to $350,000 at 60% APR

    First off, Lendza is not a direct lender. Rather, it is a small business loan platform that connects small businesses to a wide range of lenders. You start by filling an online loan application form and wait for the website to pair you with different lenders with whom you can work out loan details. Some of the upsides of the platform are that it not only presents with several loan options but also markets your business to a pool of lenders ready to fund a wide range of business loans. The maximum loan anyone can apply here is capped at $350,000 with an extended repayment period of up to 25 years depending on the type of loan. The interests charged here are also highly dependent on such factors as the nature and viability of your business but range between 4.25% and 60%. You, however, might want to be a little patient with their application process as it may take anywhere between 2 days and nine months to have the loaned funds deposited into your account.

    Our Rating

    • Has some of the most extended loan repayment periods that translate to affordable monthly installments.
    • Low minimum requirements for loan application and approval.
    • The loan platform doesn’t charge extra fees for linking you with a lender.
    • Sluggish loan processing and funding process.
    • Lendza is not a direct lender.

    Fundbox – up to $100,000 at 79.8% APR

    Fundbox is most suitable for small and medium enterprises seeking immediate cash access to address time-sensitive business needs. This is premised on the fact that the lender has some of the fastest turnarounds to loan application processing and funding. The lender maintains a maximum loan limit of $100,000 that they promise to deposit into your bank account within 24 hours of loan application and approval. Unlike most other lenders that offer full blow loan services, Fundbox opens a line of credit for your business whose interest ranges from 10% to 79%. Loan repayments are weekly and you have to repay the loan in 12 to 24 weeks. Some of the factors set Fundbox apart from the competition include the fact that they don’t charge origination fees or penalties for late payments. You, however, must have been in business for at least six months and report annual revenue of $50,000.

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    • You stand to save cash on interest amounts if you make early repayments.
    • You stand to save cash on interest amounts if you make early repayments Doesn’t charge loan origination or closing fees.
    • Fastest online application process and even faster funding – within 24 hours.
    • One may consider their $100,000 loan limit relatively limiting.
    • Demands weekly loan repayments.

    Kabbage – up to $250,000 at 99% APR

    Kabbage specializes in small business working capital funding by helping them open a business line of credit of up $250,000. But you will need a credit score of above 550 points to qualify for the cabbage business loan. Your small business must also have been in operation for over one year and reported minimum annual revenue of $50,000 or $4,200 for the past three months. Kabbage also maintains some of the fastest loan application processing and funding policies given that its online loan application process takes no more than 10 minutes and that you can expect to receive these funds within 24 hours. You then have between 6, 12, and 18 months to repay this loan depending on the loaned amounts with the loan costs standing at between 24% and 99% APR.

    Our Rating

    • Relatively fast loan application and funding processes.
    • Attractive limits for a line of credit and flexed monthly repayments.
    • Transparent loan pricing with no hidden/additional fees.
    • One may consider their 99% APR prohibitive.
    • Requires a blanket attachment of all company assets as loan collateral.

    LoanBuilder – up to $500,000 at 18.72% APR

    To qualify for a small business loan with Loan Builder, you will need a minimum credit score of 550 points. You also must have been in business for the past 12 months with an annual revenue of $100,000. The lender maintains an attractive loan limit of $500,000 but you must commit to repaying the loan within 52 weeks. The loan APR here ranges from 12% to 136%. Some of the factors that make LoanBuilder stand out from competition to include the fact that the lender will avail the funds to you within 3 days after application and don’t impose additional fees and charges on the loaned amounts.

    Our Rating

    • Relatively fast loan application processing and funding.
    • Fixed interest rates help you understand the loan costs early on.
    • Maintains some of the highest loan limits.
    • One may consider their 136% APR quite uncompetitive.
    • Demands for a tight repayment schedule – 12 months – and this exerts unnecessary pressure on the small businesses finances.

    How do you increase your chances of landing a business loan with a bad credit?

    i. Get your businesses financial records in order

    After the credit score, every bad credit business financial will be assessing your enterprise’s financial health next. If you hope to increase your chances of landing a bad credit business loan, you need to start getting your personal and business financial records in order.

    ii. Apply only for loans you qualify for

    The more negative information you have on your credit report, the lower your credit score dips. This includes credit checks with different lenders that never materialize. To avoid this, go through the different bad credit business loan providers and ensure that you only apply with an institution if you meet their minimum prequalification requirements in terms of credit scores and annual business revenues.

    iii. Arm yourself with proof of projected future incomes

    Most of the bad credit business loan providers take into account more than just your credit score in assessing your credibility. They are particularly interested in your recent business incomes and the impact the loan may have on your future income projections. Use this as a selling point when applying for a bad credit loan.

    iv. Attach assets as collateral

    Every lender needs reassurance that you are committed to repaying the bad credit business loan amounts advanced. And while most will consider healthy financial records and promising projected incomes, some need further reassurance that they won’t lose their funds should these sources of funds prove unreliable. In such a case, attaching personal and business assets as collateral for the loan comes in handy.

    Bottom line

    Establishing a business and getting it off the ground often comes at a cost to your credit score. During this time, you probably had to rely on loans and even maxed out credit cards that you were unable to repay in time to inconsistencies in business income. And while banks use this to rule you out as credit risk, such a bad credit shouldn’t keep you from expanding your business operations or grounded in the case of business crippling emergencies like equipment failure or after natural disasters. Bad credit business loan lenders hope to help you gain access to funds with your bad credit while helping build your non-existent or rebuild your injured credit scores by sharing your loan repayment progress reports with the different credit reference bureaus.

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    Glossary of Loan Terms


    What is the difference between personal and business credit scores?

    A personal credit score refers to documented records sourced from different financial services providers like banks, credit unions, mortgage companies, and innovative finance platforms detailing your interaction with their credit services. It highlights your borrowing history and ranks your ability and timeliness in repaying credit advances. A business credit score is no different from a personal score as it also details your company’s borrowing history by rating its ability and timeliness in making payments. Note that while most established businesses can use their credit rating – independent of their founder’s or manager’s credit scores – to access loans, most lenders will consider both the founder/manager’s credit score and that of the business when assessing an SMEs creditworthiness.

    What are the chances of my bad credit business loan getting approved?

    Your bad credit business loan will always get approved if your business indicates signs of proper management and solid financial health. It is therefore important that you maintain proper business financial records and ensure that you comply with the lender’s qualification terms if you hope to increase your chances of getting your bad credit business loan approved.

    How long do I have to wait to receive the loan amounts after the funds are approved?

    The wait time to receiving your funds is entirely dependent on your lender and, to some extent, the type of credit applied for. From our list of best bad credit business loan providers for 2020, you will note that most lines of credit providers have the fastest turnaround times ranging from same-day funding to deposits within 24 hours. One-time loans, on the other hand, have to wait between 2 days and up to 9 months – like in the case of Lendza.

    Does the bad credit business loan affect my credit score?

    Yes, in two fundamental ways. Firstly, the rating scales take into account the number of times a lender(s) pulls out your credit score. Too many credit checks from different lenders and unsuccessful funding are interpreted as a red flag to other lenders. Secondly, most bad credit business loan providers will also report your loan repayment status to the different credit reference bureaus. Therefore timely payment helps build/rebuild your score while negative reporting by the bad credit business lender dips your already low score.

    What if I can’t repay the business loan?

    Most bad credit business lenders will only advance you credit if they are satisfied with your ability to repay. They also have specialized credit departments that work closely with you and your business – adjusting the payment plans and amounts as needed – to ensure you don’t lag with your pay. But if you default and they are unable to find other means of recovering their cash, they will turn to your loan collateral – auctioning it to cover their losses.

    Is the bad credit business loan considered a taxable income?

    No, bad credit business loan is not a taxable income. On the contrary, the loan interest paid for these loans is in most cases considered tax-exempt. Different states, however, have different bad credit business loan laws and you are better off getting advice from a tax consultant on how to treat the loans and their interests.

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    Edith is an investment writer, trader, and personal finance coach specializing in investments advice around the fintech niche. Her fields of expertise include stocks, commodities, forex, indices, bonds, and cryptocurrency investments. She holds a Masters degree in Economics with years of experience as a banker-cum-investment analyst. She is currently the chief editor, learnbonds.com where she specializes in spotting investment opportunities in the emerging financial technology scene and coming up with practical strategies for their exploitation. She also helps her clients identify and take advantage of investment opportunities in the disruptive Fintech world.


      • Yes, a guarantor can help you get approved for a bad credit business loan. However, a guarantee usually isn’t enough to get you approved. Some lenders will accept a guarantor but you will still need to show them that you’re a strong business.
      • Generally, the length of a business loan proposal depends on the amount of loan you’re applying and the lender that you’re applying with. If you are applying for a huge amount, you will need a detailed business loan proposal. If it’s a small, short term loan then a proposal of a single page may be enough.
      • It depends on the lender you are applying with. Usually, bad credit loan lenders offer loans up to $500,000.
      • There is no minimum credit score requirement to get a bad credit business loan. However, the lower the credit score, the higher is the interest rate. When you are applying for a bad credit business loan make sure to have a solid business plan so that you can repay your debt on time.

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