Best Startup Business Loans For Bad Credit Of 2023 (2023)

Best Startup Business Loans for Bad Credit 2023

FEATURED PARTNER OFFER

Best for Working Capital Loans

Biz2Credit

4.0

Best Startup Business Loans For Bad Credit Of 2023 (1)

Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.

Loan amounts

$25,000 to $2 million

APR

Not disclosed

Minimum credit score

575

Learn More

From participating partners via businessloans.com's website.

Loan amounts

$25,000 to $2 million

APR

Not disclosed

Minimum credit score

575

Why We Picked It

Biz2Credit makes working capital loans between $25,000 and $2 million available to business owners with bad personal credit. Its working capital loans are paid back with your business receipts through daily, weekly or bimonthly payments. It only takes a few minutes to apply and 24 hours to receive a decision.

In the event that Biz2Credit cannot provide a financial product, it may present third-party options to qualified prospective borrowers. However, Biz2Credit confirms that “in the vast majority of cases, [it] will make a financing decision without referral to any external party.”

Biz2Credit also offers traditional term and commercial real estate (CRE) loans; however, those require a minimum credit score of 660 and are not suited for bad credit borrowers.

Pros & Cons

  • Low minimum credit score
  • Low minimum annual revenue requirement of $100,000
  • Quick application, approval and funding process
  • More stringent qualification requirements for term and CRE loans
  • Working capital loans require daily or biweekly payments

Extra Details

Eligibility: To qualify for a working capital loan, applicants must have a minimum personal credit score of 575, have been operating their business for at least six months and have annual revenue greater than $100,000.

Funding time: Business owners can apply within four minutes, get a decision as fast as 24 hours and receive funds within 72 hours from approval.

Best Startup Business Loans For Bad Credit Of 2023 (2)

Learn More Best Startup Business Loans For Bad Credit Of 2023 (3)On Quickbridge's Website

Have you considered QuickBridge?

QuickBridge provides small business loans to business owners nationwide. Applying is quick and funding can happen within 24 hours, but you need fair to excellent credit to qualify.

  • Flexible loan terms

  • Quick application and fast funding deposited to a bank account

  • Early payoff discounts

Learn More Best Startup Business Loans For Bad Credit Of 2023 (4)On Quickbridge's Website

FEATURED PARTNER OFFER

Best for Fast Funding

QuickBridge

Best Startup Business Loans For Bad Credit Of 2023 (5)

4.0

Best Startup Business Loans For Bad Credit Of 2023 (6)

Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.

Loan amounts

Up to $500,000

APR

Factor rates start at 1.10

Best Startup Business Loans For Bad Credit Of 2023 (7)

Learn More Best Startup Business Loans For Bad Credit Of 2023 (8)

On Quickbridge's Website

Loan amounts

Up to $500,000

APR

Factor rates start at 1.10

Minimum credit score

580

Why We Picked It

QuickBridge provides small business loans to business owners nationwide. Applying is quick and funding can happen within 24 hours, but you need fair to excellent credit to qualify.

Interest on loans from QuickBridge is expressed as a factor rate. To determine the cost of borrowing, multiply your desired loan amount by the factor rate. For example, if you borrow $30,000 at a factor rate of 1.10, you would owe $33,000 in total with $3,000 in interest.

Pros & Cons

  • Flexible loan terms
  • Quick application and fast funding deposited to a bank account
  • Early payoff discounts
  • Origination fee
  • Loan interest may be high
  • $250,000 minimum annual revenue requirement for small business loans

Extra Details

Eligibility: Business owners need fair to excellent credit to qualify for a QuickBridge loan. On the FICO score scale, fair credit is considered to be at least 580. However, we recommend a score of at least 600.

Additionally, your business must be in operation for at least six months and have a minimum annual revenue of $250,000 to qualify.

Turnaround time: QuickBridge provides as quick as 24 hours.

FEATURED PARTNER OFFER

Best for Quick Approvals

Fundbox

Best Startup Business Loans For Bad Credit Of 2023 (9)

3.5

Best Startup Business Loans For Bad Credit Of 2023 (10)

Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.

Loan amounts

$1,000 to $150,000

APR

Start at 4.66%

Minimum credit score

600

Best Startup Business Loans For Bad Credit Of 2023 (11)

Learn More Best Startup Business Loans For Bad Credit Of 2023 (12)

On Fundbox's Website

Loan amounts

$1,000 to $150,000

APR

Start at 4.66%

Minimum credit score

600

Why We Picked It

Fundbox is an AI-powered business lending platform that speeds up the application, decision-making and funding process. It offers decisions within three minutes and funds as soon as the next business day.

Prospective borrowers have two business financing options through Fundbox. Business owners can apply for revolving business lines of credit up to $150,000 with repayment terms of 12 or 24 weeks. Your available credit goes back up as you repay your line of credit.

Pros & Cons

  • Receive a decision within three minutes
  • Low minimum credit score requirement
  • Next-day funding
  • Only short-term repayment terms are available
  • Relatively low lines up credit of up to $150,000

Extra Details

Eligibility: Applicants must have a minimum personal credit score of 600 to qualify for financing through Fundbox. The applicant’s business must only be in operation for at least six months, making it a possible option for startups. However, businesses must have at least $100,000 in annual revenue.

Funding time: Whether you’re getting a line of credit, your funds transfer to your bank account as soon as the next business day.

FEATURED PARTNER OFFER

Best for Product Availability

Rapid Finance

Best Startup Business Loans For Bad Credit Of 2023 (13)

3.5

Best Startup Business Loans For Bad Credit Of 2023 (14)

Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.

Loan amounts

$5,000 to $1 million

APR

Not disclosed

Minimum credit score

550

Best Startup Business Loans For Bad Credit Of 2023 (15)

Learn More Best Startup Business Loans For Bad Credit Of 2023 (16)

From participating partners via businessloans.com's website.

Loan amounts

$5,000 to $1 million

APR

Not disclosed

Minimum credit score

550

Why We Picked It

Rapid Finance is an online lender that has funded over $2 billion in business financing across a variety of industries. Business owners looking for unsecured loans can access a wide variety of options, including term loans, lines of credit, merchant cash advances and invoice factoring.

Rapid Finance unsecured loans range from $5,000 to $1 million with terms from three to 60 months, depending on the specific type of loan. However, business owners with bad credit typically won’t receive the largest loan amounts. What’s more, borrowers are required to meet daily or weekly repayment schedules.

To apply, applicants will need a form of identification, business bank account number and routing information, and their last three months of business bank statements.

Pros & Cons

  • Loans up to $1 million
  • Less stringent minimum qualification requirements
  • Fast closing and funding
  • Doesn’t disclose APRs or monthly fees
  • Maximum terms of five years
  • Smallest loan amount is $5,000

Extra Details

Eligibility: To qualify for a Rapid Finance business loan, prospective borrowers must have a minimum credit score of 550, be in business for at least six months and have at least $5,000 in monthly revenue.

Turnaround time: Rapid Finance prides itself in fast turnaround times. Roughly 90% of its loans are funded within 24 hours, but it can take up to two days in some cases.

FEATURED PARTNER OFFER

Best for Loan Options

Credibly

Best Startup Business Loans For Bad Credit Of 2023 (17)

3.0

Best Startup Business Loans For Bad Credit Of 2023 (18)

Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.

Loan amounts

$5,000 to $400,000

APR

Factor rates as low as 1.11

Minimum credit score

500

Best Startup Business Loans For Bad Credit Of 2023 (19)

Learn More Best Startup Business Loans For Bad Credit Of 2023 (20)

On Credibly's Website

Loan amounts

$5,000 to $400,000

APR

Factor rates as low as 1.11

Minimum credit score

500

Why We Picked It

Credibly offers a wide range of business loans for bad credit—working capital loans, business lines of credit and merchant cash advances, specifically. What’s more, new businesses may also find it easier to secure financing because Credibly only requires businesses to be in operation for at least six months.

Working capital loans of up to $400,000 are available with terms between six and 18 months; payments are due daily or weekly. If a business owner should choose a business line of credit, they can access credit lines up to $250,000. Lastly, Credibly offers merchant cash advances (MCAs) up to $400,000 with terms between three and 18 months.

Pros & Cons

  • Wide variety of loan products
  • Low credit score requirement
  • Fast funding times
  • Lowest loan amount is $5,000
  • Requires daily or weekly payments

Extra Details

Eligibility: To qualify for financing through Credibly, business owners must have a minimum personal credit score of 500, be in business for at least six months and have at least $15,000 in average monthly bank deposits.

Turnaround times: Credibly offers same-day approvals and as soon as same-day funding once approved.

FEATURED PARTNER OFFER

Best for Crowdfunding Up to $15,000

Kiva

Best Startup Business Loans For Bad Credit Of 2023 (21)

3.0

Best Startup Business Loans For Bad Credit Of 2023 (22)

Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.

Loan amounts

Up to $15,000

APR

0%

Minimum credit score

None

Best Startup Business Loans For Bad Credit Of 2023 (23)

Learn More Best Startup Business Loans For Bad Credit Of 2023 (24)

From participating partners via businessloans.com's website.

Loan amounts

Up to $15,000

APR

0%

Minimum credit score

None

Why We Picked It

Kiva is a microlender that offers a unique crowdfunding platform for a wide variety of prospective borrowers. Compared to traditional financing, Kiva utilizes your personal network and its own network of 1.6 million investor lenders to crowdfund loans up to $15,000 with terms up to 36 months.

Business owners who apply directly through Kiva’s website may receive 0% interest. Kiva refers to these as Direct Loans, which are only available to businesses in the U.S. and social enterprises internationally. However, if a prospective borrower applies through a Kiva Field Partner—local organizations working in communities to vet borrowers, provide services and administer loans—they will likely pay interest to the partner in some form, which varies by partner.

Loan funds are distributed and repaid through PayPal or Kiva’s Field Partners.

Pros & Cons

  • No minimum credit score requirement
  • Does not require cash flow documents
  • Requires no collateral
  • Maximum loan amounts of $15,000
  • All loans are crowdfunded
  • Long funding times

Extra Details

Eligibility: Because Kiva uses a crowdfunding method, it’s able to offer less stringent qualification requirements. Although Kiva loans don’t require a minimum credit score, years of cash flow documents or collateral, borrowers are vetted or endorsed by either a local Field Partner, Trustee or members of the community.

Turnaround time: After you submit your application, a Kiva representative will get back to you within 10 to 15 business days. Kiva suggests that “submitting a great photo and business story will help your application make it through the review process more quickly.”

Once you’re approved for fundraising, you have 15 days to raise funds from your own network, and then 30 days to publicly fundraise with Kiva’s network of lenders.

Summary: Best Startup Business Loans for Bad Credit

CompanyCompany - LogoForbes Advisor RatingForbes Advisor RatingLoan amountsAPRTime in businessMinimum credit scoreLearn More CTA textLearn more CTA below textLearn More
Biz2CreditBest Startup Business Loans For Bad Credit Of 2023 (25)4.0Best Startup Business Loans For Bad Credit Of 2023 (26)$25,000 to $2 millionNot disclosed6 months 575Learn MoreFrom participating partners via businessloans.com's website.
QuickBridgeBest Startup Business Loans For Bad Credit Of 2023 (27)4.0Best Startup Business Loans For Bad Credit Of 2023 (28)Up to $500,000Factor rates start at 1.10580Learn MoreOn Quickbridge's Website
FundboxBest Startup Business Loans For Bad Credit Of 2023 (29)3.5Best Startup Business Loans For Bad Credit Of 2023 (30)$1,000 to $150,000 Start at 4.66%6 months 600Learn MoreOn Fundbox's Website
Rapid FinanceBest Startup Business Loans For Bad Credit Of 2023 (31)3.5Best Startup Business Loans For Bad Credit Of 2023 (32)$5,000 to $1 million Not disclosed6 months 550Learn MoreFrom participating partners via businessloans.com's website.
CrediblyBest Startup Business Loans For Bad Credit Of 2023 (33)3.0Best Startup Business Loans For Bad Credit Of 2023 (34)$5,000 to $400,000 Factor rates as low as 1.116 months 500Learn MoreOn Credibly's Website
KivaBest Startup Business Loans For Bad Credit Of 2023 (35)3.0Best Startup Business Loans For Bad Credit Of 2023 (36)Up to $15,000 0%No requirement NoneLearn MoreFrom participating partners via businessloans.com's website.

Tips to Compare Startup Business Loans for Bad Credit

As you shop around for a startup business loan, consider these tips:

  • Find out the credit requirements. Every lender sets its own minimum credit score, so look for one that could be a good fit for your credit profile. Be wary of lenders that promise loans with no credit checks, as they may be predatory lenders that will charge sky-high rates and fees.
  • Research other lender requirements, too. Some lenders may want to see a certain amount of business revenue or personal income before approving you for a loan. Requirements may be higher for bad-credit borrowers, as a lender wants to reduce the risk that you’ll default on your loan.
  • See how high the interest rates go. With bad credit, you’ll likely get assigned higher rates on a startup business loan. Check out a lender’s range to make sure the rates don’t climb into unaffordable territory.
  • Compare repayment terms and schedule. Find out how long you have to pay back the loan and whether you have to make payments on a daily, weekly or monthly basis.
  • Watch out for loan fees. Extra fees can add to your costs of borrowing, so make sure there aren’t any surprise charges hidden in the fine print.
  • Explore the lender’s customer service options. Ideally, you’ll find a lender that offers responsive customer support and a variety of contact options, such as phone, email or instant web chat.
  • Read customer reviews. Finally, take some time to read reviews on respected sites like Trustpilot to see what other borrowers have to say about their experience with a lender.

What Is Considered a Bad Credit Score?

When you’re borrowing a startup business loan, your business might not have built much of a credit score yet. As a result, your personal credit score will carry greater weight in your application.

On the FICO scoring model, a credit score of 580 or below is considered poor. Credit scores of 580 to 669 are considered fair, though applicants with these scores may still be considered subprime borrowers.

Some lenders offer bad credit startup business loans to business owners with credit scores starting at 500. Others have higher requirements of 550 or 600.

As mentioned, poor or fair credit may mean you get saddled with higher interest rates. You’ll need a good score of 670 or higher to qualify for more competitive rates.

How to Get a Startup Business Loan With Bad Credit

Every lender sets its own requirements, but the process of applying for a startup business loan will probably be similar across the board. Here are the general steps you’ll need to take:

  1. Review your credit profile. By knowing your credit score, you won’t waste your time with lenders who set higher score minimums. You can also go to AnnualCreditReport.com to request free copies of your credit reports from the three major credit bureaus—Equifax, Experian and TransUnion—to see if they contain errors that can drag down your credit score.
  2. Work on improving your credit, if you have time. If you don’t have an immediate need for a startup business loan, take some time to improve your credit score. Disputing errors on your credit reports, reducing your credit utilization ratio, paying down debts and making on-time payments on loans can all help your score.
  3. Prepare your documentation. You’ll need to provide documents such as your business plan, bank statements, business licenses and more to qualify for a loan. If you have bad credit, a lender may closely examine your revenue or business plan to ensure you can repay your loan on time.
  4. Consider adding a co-signer or collateral to your loan. Qualifying for a startup business loan with bad credit on your own may be difficult. Adding a co-signer to your loan or securing the loan with collateral may make it easier to get approved. But be warned: If you find yourself unable to pay the money back, you can lose your collateral or destroy your relationship with your co-signer, who will be left on the hook for the loan.
  5. Shop around with multiple lenders. Since your bad credit may lead to higher interest rates, it’s important to compare more than one offer for a startup business loan to minimize your costs of borrowing.
  6. Submit a formal loan application. Once you’ve found a lender willing to work with you, submit a full application. The lender may contact you if it requires additional documentation to approve your loan.

Types of Startup Business Loans for Bad Credit

Every lender sets its own borrowing requirements, so don’t assume that subprime credit will disqualify you from a startup business loan. Here are some types of loans you may be able to obtain:

  • Term loans. Banks, credit unions and online lenders offer term loans that you can pay back over a period of time, often anywhere from three months to 10 years. Online lenders may be more lenient than banks about credit score requirements and can often offer faster funding times, too.
  • Secured loans. A secured startup loan requires you to put up an asset as collateral. Secured loans may have more flexible credit requirements than unsecured ones because the lender can recoup your asset if you fall behind on payments.
  • Business lines of credit. While a business loan offers a lump sum of funding upfront, a business line of credit lets you draw out funds as you need them and pay them back on a revolving basis, often for up to five years.
  • Working capital loans. A working capital loan is a short-term loan you can use to cover day-to-day operations. It may be easier to qualify for than a long-term loan if you have bad credit.
  • Equipment financing. This helps you purchase equipment for your business. It’s typically a secured form of debt that uses your equipment as collateral.
  • Invoice factoring. Sell unpaid invoices to a factoring company at a discounted price in exchange for immediate cash.
  • Merchant cash advances. Receive a lump sum upfront that you’ll pay back with automatic deductions from your future credit and debit card sales.

While the lowest interest rates are reserved for the most creditworthy borrowers, you’re not necessarily out of luck if you have bad credit. Your rates may be higher, but it could still be possible to qualify for a startup business loan.

Make sure to review your loan offer before borrowing, as you wouldn’t want to take on expensive debt you can’t afford to pay back. Compare your options for startup business loans for bad credit carefully to make the best financial decision for you and your company.

Methodology

We reviewed 16 popular lenders based on 14 data points in the categories of loan details, loan costs, eligibility and accessibility, customer experience and the application process. We chose the best lenders based on the weighting assigned to each category:

  • Loan cost: 25%
  • Loan details: 25%
  • Eligibility and accessibility: 20%
  • Customer experience: 20%
  • Application process: 10%

Within each major category, we also considered several characteristics, including available loan amounts, repayment terms and applicable fees. We also looked at minimum credit score and time-in-business requirements. Finally, we evaluated each provider’s customer support tools, borrower perks and features that simplify the borrowing process—like online applications, prequalification options and mobile apps.

Where appropriate, we awarded partial points depending on how well a lender met each criterion.

Find the Best Small Business Loans of 2023

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Forbes Advisor adheres to strict editorial integrity standards. To the best of our knowledge, all content is accurate as of the date posted, though offers contained herein may no longer be available. The opinions expressed are the author’s alone and have not been provided, approved, or otherwise endorsed by our partners.

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