Bad Credit Business Loans

We assist small business owners with imperfect credit in partnering with alternative lenders to obtain financing.

Intro To Bad Credit Business Loans

A poor credit score doesn’t always indicate irresponsibility. Many diligent small business owners find themselves with bad credit due to circumstances beyond their control. It’s common for them to rely on personal finances to sustain their businesses during the early years. Unfortunately, once your credit score suffers, it can take considerable time to recover. To support these business owners, we provide access to bad credit financing options, known as Bad Credit Business Loans.

These loans are specifically tailored for business owners with bad credit but come without excessive fees and unfavorable repayment terms that could jeopardize your finances further. Unlike traditional business loans, bad credit business loans are designed to allow small business owners to make manageable payments without straining their cash flow.

What Are Bad Credit Business Loans?

Bad credit business loans are tailored for small business owners with credit scores below 600. These financing solutions provide the essential funds to keep your business running, settle existing debts, or cover short-term expenses. Typically, the terms for these loans do not exceed eighteen months and come with higher interest rates compared to other options like Merchant Cash Advances or Unsecured Business Loans. However, the loan amounts and repayment structures are designed to be manageable, making it easier for business owners to repay and quickly meet eligibility requirements for future loans, while potentially improving both their business and personal credit scores.

Explore this guide to learn about the financing options available for small business owners with poor personal credit scores and understand what to consider when seeking loan approval. With this knowledge, you can make informed decisions about small business loans for bad credit.


$1K – $5M


Starting at 1-6% p/mo


3 months – 5 years


1-3 Business days

How Do Business Loans For Bad Credit Work?

These are the best bad credit business loans available:

Business Line of Credit
Equipment Financing
Merchant Cash Advance
Working Capital Loans
Revenue-Based Financing
Invoice/Receivables Factoring

At 60Day Capital, the only small business loans not listed here are Business Term Loans and Small Business Administration (SBA) Loans. This is because when term loans or SBA loans lose their high borrowing amounts, low-interest rates, and long terms, they effectively become short-term loans or resemble products like invoice financing (receiving upfront payment on unpaid invoices) and merchant cash advances. SBA and term loans are considered the best small business loans, offering the lowest interest rates on the market and are typically available only to business owners with high personal credit scores.

In contrast, every loan option on our poor credit list can be repaid quickly and offers modest funding amounts. These options allow small business owners to choose from various alternative lenders and flexible repayment schedules, including weekly, bi-weekly, or monthly payments, rather than being locked into fixed monthly payments.

Some bad credit small business loans focus more on cash flow and sales volume than credit scores. For instance, the borrowing amount for a merchant cash advance is based entirely on monthly debit and credit card sales. With accounts receivable factoring and invoice financing, your personal credit score is largely irrelevant. Revenue-based business loans have similar credit score requirements as merchant cash advances but consider your total monthly sales, not just card transactions.

Business lines of credit are also available to those with poor credit scores, though the terms may not be as favorable as those from a local bank. Nonetheless, small business owners with poor or limited credit can still access revolving lines of credit if this suits their business needs best.

Moreover, business equipment financing offers a structure similar to term loans, using the desired equipment as collateral. This reduces the risk associated with poor credit histories and personal credit scores.

Bad Credit Business Loans – Research, Facts & Reports

Nearly 65% of medium and high-risk credit applicants received at least partial approval when applying to online lenders (Source: 2023 Small Business Credit Survey).

55% of business loan applicants at online lenders cited the speed of credit decisions as their primary motivating factor (Source: 2023 Small Business Credit Survey).

Most traditional lenders generally require a minimum personal credit score of 650 for approval. Additionally, lenders offering traditional business credit loans and lines of credit typically prefer a minimum personal credit score of 680 (Source: Experian).

What Are The Advantages of Business Loans With Bad Credit?

The primary advantage of small business loans for bad credit is their accessibility. Even with a poor credit score, you can still get approved if your business has a steady cash flow. Strong sales can also mitigate the impact of a poor personal credit score on the loan’s cost and terms.

Bad credit borrowers can use the funds to pay off existing debts, a common cause of poor credit. Many traditional lenders, however, do not permit funds to be used for this purpose or approve borrowers with significant existing debt.

Another advantage is establishing a track record of timely payments. While not every bad credit small business loan will directly impact your personal credit score, demonstrating your ability to repay a loan on time can qualify you for larger funding with lower interest rates and more favorable terms in the future.

Think of this type of small business loan or line of credit as the first step toward securing all the financing you need to achieve your goals. Less-than-perfect credit doesn’t make your goals unattainable; it just means you may have to wait a bit longer to reach them.

What Are The Disadvantages of Business Loans With Bad Credit?

Bad credit business loans typically do not offer the most competitive rates or highest loan amounts, reflecting the increased risk associated with poor credit. Alternative lenders manage this risk by providing smaller borrowing limits, higher interest rates, and shorter repayment terms.

Another potential drawback involves choosing the wrong small business loan product or repayment schedule. While these loans are designed with manageable terms, each business operates on unique cash flow cycles. What is feasible for one company may strain another’s finances. Opting for an unsuitable loan with high rates and inflexible repayment terms (such as daily, weekly, or bi-weekly schedules) could adversely affect cash flow. In some cases, the urgency to secure funding may lead to rushed decisions that have negative financial implications.


Business Loan Product Comparison


How To Apply For Bad Credit Business Loans

Approval times vary depending on the chosen product and your business’s financial health. Some products can be approved in less than 24 hours, while others may take up to a week. Here’s how to apply:

Step 1: Choose the Right Product

Bad credit business loans are available in diverse forms. To choose the right loan, assess which borrowing terms pose the least risk to your cash flow. Does your business operate in a highly seasonal manner? Do you encounter occasional revenue fluctuations? Would a business line of credit or merchant cash advance assist in growing your business? Consider the intended use of the funds, as it directly influences the loan repayment timeline.

Step 2: Gather Your Documents

Depending on the available bad credit business loans, you may need the following documents and information:

Step 3: Complete the Application

Begin your application process by contacting us or completing our simple one-page online form. You’ll need to input the details mentioned in step 2 above, along with your desired loan amount.

Step 4: Speak to a Representative

Once you apply, a representative will reach out to discuss the repayment terms and interest rates for your available financing options. This ensures transparency, so you won’t encounter any surprises or hidden fees during repayment.

Step 5: Receive Approval

Typically, the application process for a bad credit business loan takes a few business days, varying based on the chosen product. Once approved and finalized, you can expect a lump sum of funds to be deposited into your checking account within 1-2 business days

Your Business Loan Gets Set Up – Now What?

Bad credit business loans offer not just funding but also a chance to enhance both your personal and business credit scores.

No matter the type of business loan you secure, it’s crucial to make all required payments punctually and completely. For business lines of credit or other forms of revolving credit, maintaining a balance below the credit limit is essential.

By consistently meeting your financing obligations on time and in full, you can boost your business credit score, paving the way for better rates and terms when seeking future business financing.

What If I’m Declined For Bad Credit Business Loans?

After assessing your business’s financial health, a lender may determine that a traditional business loan could potentially strain your cash flow. In such scenarios, we may suggest alternative financing solutions, like a business credit card or a personal loan. These options typically have more lenient qualification criteria than business loans. While a business credit card may not provide an immediate high credit limit, it can be instrumental in enhancing your credit scores. Regular use and timely payments on business credit cards contribute positively to your business credit history and elevate your creditworthiness.

Credit unions are another viable option to explore. While their assistance may vary, it’s worthwhile to investigate the loan opportunities they offer.

To optimize your credit score prior to applying for a loan, consider utilizing credit repair services. We can assist you in identifying factors that lower your credit score and devising effective strategies to address them. Enhancing your credit score before applying will broaden your range of business loan options and secure more favorable loan terms.

Contact us

175 Great Neck Rd # 206, Great Neck, NY 11021, United States