Last updated: October 2026
The best funding options for a business with bad credit are the ones underwritten on something other than your credit score. Invoice factoring looks at your customers' credit. Equipment financing is secured by the equipment. Revenue-based financing and merchant cash advances look at your bank deposits. Microloans from nonprofit lenders weigh your whole story. Among online lenders, published minimum credit scores start at 500 (Credibly), with OnDeck and Bluevine at 625. Banks generally want 660 or more. If your score is under 600 and you need money soon, start with the five steps below before you apply anywhere.
Credit under 600 and need funding soon: what to do first
- Pull your credit reports and fix errors. You can get free reports from all three bureaus at AnnualCreditReport.com. A wrong late payment or a paid-off debt still showing as open can cost you points and offers.
- Know your three numbers. Lenders in this market ask for time in business, average monthly deposits over the last 3 to 6 months, and current loan or advance payments. Have them ready, with the bank statements behind them.
- Match the product to how you will repay. Waiting on B2B invoices? Factoring. Buying a machine or truck? Equipment financing. Steady card or bank deposits? Revenue-based financing. Under $50,000 and you can wait a few weeks? A microloan.
- Prequalify with soft pulls only. Many online lenders show an offer without a hard inquiry. Applying to many lenders with hard pulls lowers your score further.
- Compare total payback in dollars before you sign. The fastest money is usually the most expensive. Take the smallest amount that solves the problem.
Best business funding for bad credit: lenders' published minimums
These are minimum credit scores and other requirements as each provider publishes them, checked in October 2026. Meeting a minimum does not mean approval.
| Provider | Product | Published minimum credit score | Other published requirements |
|---|---|---|---|
| FundThrough | Invoice factoring | None; approval is based on your customers | B2B invoices to creditworthy customers |
| Kiva U.S. | 0% interest crowdfunded loan, $1,000 to $15,000 | None; decisions are not based on credit score | No current bankruptcy, foreclosure or liens; must recruit lenders from your own network first |
| SBA microloan intermediaries | Loans up to $50,000 (average about $13,000) | Set by each nonprofit lender | Usually collateral and a personal guarantee; rates generally 8% to 13% |
| Credibly | Working capital loans, lines of credit, merchant cash advances | 500 | 6 months in business, $15,000 average monthly revenue |
| Fora Financial | Term loans and revenue-based financing | 570 (per third-party reviews) | 6 months in business, $240,000 annual revenue, no open bankruptcies |
| National Funding | Working capital loans up to $500,000; equipment financing | No hard minimum; says most customers are 600+ | Terms of 4 to 24 months for working capital |
| OnDeck | Term loans and lines of credit | 625 | 1 year in business, $100,000 annual revenue |
| Bluevine | Line of credit up to $250,000 | 625 | 12 months in business, $10,000 monthly revenue, corporations and LLCs only |
| Accion Opportunity Fund | Nonprofit term loans up to $250,000 | Not published; soft pull to prequalify | 2 years in business, $300,000 annual sales |
How to read this: under 570, your realistic options are factoring, Kiva, microloans and revenue-based products. From about 600 to 625, short-term online loans and some lines of credit open up, at a high cost. OnDeck publishes an average APR of 53.2% on its term loans. Above 660, bank products and the American Express line become possible.
The main options, from most to least accessible
1. Invoice factoring: best if you bill other businesses
A factoring company buys your unpaid invoices at a discount and advances most of their value now. Because it gets paid by your customer, it underwrites your customer's credit, not yours. This is why "factoring funding help with bad credit" is a real answer: a low score or thin credit file usually is not a deal-breaker if you invoice creditworthy businesses or government agencies. Watch for minimum volume requirements, long contracts and fees that grow the longer an invoice stays unpaid. Read our full guide to invoice factoring.
2. Revenue-based financing and merchant cash advances: best for steady deposits
These providers size the offer from your bank deposits or card sales. Credit matters less, but they will still look at it, along with any existing advances and overdrafts. A merchant cash advance is not a loan. It is a purchase of a share of your future receivables, repaid by daily or weekly remittances. A "bad credit merchant cash advance" is the same product. Your score mostly affects the price and how much you can get.
- Costs are quoted as a factor rate. A 1.30 factor on $50,000 means $65,000 is remitted, however short the term.
- Taking a second or third advance on top of the first ("stacking") is the most common way owners get trapped.
- See what a merchant cash advance is and how much an MCA costs before you sign.
3. Equipment financing: best for a specific purchase
The equipment secures the financing, so lenders can accept weaker credit than for unsecured loans. Expect a larger down payment or a higher rate with a low score. Titled assets such as trucks and machinery with resale value are easier to finance than software or custom fixtures. See our equipment financing guide.
4. Microloans and CDFI loans: best for small amounts at a fair price
SBA microloans go up to $50,000 through nonprofit intermediaries, with terms of up to 7 years. The SBA says rates are generally 8% to 13%. Each intermediary sets its own credit standards, and many work with owners who have damaged credit if the plan and cash flow make sense. Proceeds cannot be used to pay off existing debt or buy real estate. Community development lenders such as Accion Opportunity Fund are similar, though AOF's term loans need 2 years in business and $300,000 in sales.
5. Kiva: best for startups with no or poor credit
Kiva U.S. offers 0% interest, no-fee loans of $1,000 to $15,000, repaid over roughly 12 to 36 months. Kiva says it has no minimum credit score. The catch is time: you must first bring in lenders from your own network, then complete a public fundraising period.
6. Online term loans and lines of credit: best for fair credit (600+)
With a score around 600 to 625 and at least a year of solid deposits, short-term online loans and some lines of credit become possible. They are faster than banks and far more expensive. Our business line of credit guide compares published terms.
7. Secured business credit cards
A secured card backed by a cash deposit is a slow but cheap way to start rebuilding credit for small, recurring expenses. It will not fund a large need.
Can you get an SBA loan with bad credit?
The SBA does not publish a minimum personal credit score for 7(a) loans. Instead, the borrower must be "creditworthy and demonstrate a reasonable ability to repay." In practice:
- For 7(a) small loans of $350,000 or less, lenders use the FICO SBSS business score. Under SOP 50 10 8 (effective June 1, 2025) the minimum for that streamlined path rose from 155 to 165. A loan below the cutoff can still be processed as a standard 7(a) loan, but with more scrutiny.
- Most SBA lenders also set their own personal score floors, commonly in the mid-600s or higher.
- Since March 1, 2026, every direct and indirect owner of a 7(a) or 504 borrower must be a U.S. citizen or U.S. national whose principal residence is in the U.S. Lawful permanent residents no longer qualify.
- Startups and buyers of an existing business need a 10% equity injection.
SBA startup loans with bad credit are rare. SBA microloans and Kiva are the most realistic government-backed or nonprofit paths. For more, see our guide on financing for startups.
High-risk business loans: what "high risk" means
Lenders call a business high risk for weak credit, but also for its industry (restaurants, trucking, cannabis-adjacent), short history, tax liens or heavy existing debt. The fix is the same: go to lenders whose underwriting matches your strength, whether that is invoices, equipment or deposits. Disclose problems such as tax payment plans up front, because lenders will find them.
How to avoid making bad credit worse
- Do not stack. One affordable payment beats three overlapping ones.
- Read the contract for confession-of-judgment clauses and early payoff terms.
- Be wary of "guaranteed approval" or "no credit check" promises, and of anyone asking for an upfront fee before funding.
- Pay on time and keep deposits clean. After 6 to 12 months of on-time payments and no overdrafts, refinance into something cheaper.
Frequently asked questions
What is the easiest business funding to get with bad credit?
Invoice factoring, if you have B2B invoices, because it relies on your customers' credit. Without invoices, revenue-based products such as a merchant cash advance rely mostly on your deposits, but they usually cost the most.
Can I get business funding with a 500 credit score?
Yes, but options are narrow. Credibly publishes a 500 minimum with 6 months in business and $15,000 a month in revenue. Factoring, Kiva and many microlenders have no published score minimum.
Does applying hurt my credit?
Prequalification with a soft pull does not. A hard pull, usually at final approval or acceptance, can lower your score a few points. Ask each lender which kind it uses.
What is the best place to get a business loan with bad credit?
Start with your own bank or credit union, then a local CDFI or SBA microlender. Only then move to online lenders. The cheapest lender that will say yes is the best one, and that is often a mission-driven lender rather than the fastest online one.
Comparing bad-credit options through a broker
Each provider above has a different credit box, and applying one by one can mean repeated declines and hard pulls. FSE is an independent commercial finance brokerage working with 50+ lending partners across working capital, lines of credit, equipment financing, real estate-backed funding and merchant cash advances. One application lets us compare what you may qualify for. Our application asks for at least one year in business and $10,000+ in monthly revenue. Approval and terms depend on each lender. Start a no-obligation application.
Sources
- FundThrough: invoice financing with no credit check
- Kiva U.S. loans
- SBA: Microloans; 7(a) terms and eligibility
- SBSS minimum under SOP 50 10 8: Grasshopper Bank
- Citizenship rule: Compliance Alliance summary of the SBA procedural notice
- Credibly; National Funding; OnDeck qualifications and average APR; Bluevine line of credit; Accion Opportunity Fund term loans
- Fora Financial requirements: Bankrate review
- AnnualCreditReport.com
Lender details were checked in October 2026 and change often; confirm terms with each lender. Inclusion is not an endorsement and does not mean a lender is part of FSE's network.