Bad credit business loans are real, and what you can get with a low score depends on what a funder can rely on besides the score. Revenue-based financing is decided mainly on your deposits, equipment financing is secured by the equipment, and a commercial equity loan is secured by commercial property you own, so those are where a low score counts least. Lines of credit weigh your credit more, and bank loans usually mean waiting until the score recovers.
Bad credit is a specialty of ours. On our application, the only credit cutoff is a personal score below 500. Any score from 500 up is reviewed, and if you are under 500 you can still finish the application and we will tell you what is realistic for your file.
What counts as bad credit
FICO's guide to credit scores calls a score below 580 poor and 580 to 669 fair, and it says no single minimum applies to every lender, because each one sets its own criteria. The Federal Reserve Banks draw their lines higher in the Small Business Credit Survey, where a personal score of 720 or above is low credit risk, 620 to 719 is medium and anything below 620 is high. So "bad credit" has no fixed number, and the same score can get a no in one place and a full review in another.
If a bank already turned you down
A no from a bank tells you how that bank reads your file. In the Federal Reserve Banks' 2026 Report on Employer Firms, applicants rated medium or high credit risk were at least partly approved 54% of the time at large banks and 61% at small banks, compared with 66% at finance companies and 70% at online lenders. Low-risk applicants did better at all four, at 74% to 90%, so a weaker score does lower the odds. That medium and high group runs up to a 719 score, so a 540 sits at the harder end of those figures.
The same report shows why applicants get turned down. Among those not approved for at least some of what they sought, 46% said lender requirements were too strict, 37% said they already had too much debt and 30% named a low credit score, and they could choose more than one reason. Denial rates also differ by product, across applicants at every score, from 11% for auto and equipment loans and 12% for merchant cash advances to 24% for business lines of credit and 40% for SBA loans and lines.
Bad credit business loans, ranked by how much your score counts
Here are the options we work with, from where the score counts least to where it counts most. Every funder sets its own requirements and they vary widely, so treat the order as the usual pattern. For a ranking by documents, collateral and speed, see our guide to the easiest business loans to get.
| Option | What the decision rests on | How much your score counts | How fast |
|---|---|---|---|
| 1. Revenue-based financing, $5,000 to $2,000,000 | Four months of business bank statements | Least, as one factor among several | Typically funded within one to two business days of choosing an offer |
| 2. Equipment financing, up to $500,000 | The equipment, which secures the deal, and your revenue | Some, softened by the collateral | Offers typically in one to two business days |
| 3. Commercial equity loans and lines | Equity in commercial property you hold, and cash flow | Some, read next to the property and the cash flow | Commonly weeks, because of the appraisal |
| 4. Consolidation of existing advances | Your deposits and the advances you already pay | Some, with deposits and balances weighed first | Payoffs typically within days of accepting an offer |
| 5. Line of credit, up to $2,000,000 | Revenue and credit | More, and fair credit or better opens more lines | Offers in one to two business days |
| 6. Bank loans through our partners | Credit, tax returns, time in business and collateral | Most, with strong credit expected | Weeks |
Revenue-based financing, where your deposits count most
Revenue-based financing is a merchant cash advance. A funder buys part of your future sales in advance, sizes the amount on your usual revenue and collects a set daily or weekly payment until the agreed total is paid. Amounts run from $5,000 to $2,000,000, the decision rests mainly on four months of business bank statements, collateral is usually not required, and most applicants are funded within one to two business days of choosing an offer.
The cost is quoted as a factor rate and a dollar total. With a low score, the first offer is usually smaller, the factor rate higher and the term shorter, and payments are more often daily than weekly. That cost is the price of speed and of a decision based on your revenue. Our guide to merchant cash advances for bad credit shows what funders read on your statements, and our guide to merchant cash advance credit scores goes through it band by band.
Equipment financing, where the equipment secures the deal
Equipment financing up to $500,000 pays for a truck, oven, lift or machine, and that equipment secures the deal. The lender has something to recover besides your future sales, which softens the credit requirement, though many lenders still look at your score and a low one can mean a larger down payment. You send the application, recent bank statements and a quote from the seller. It pays for the equipment only, so payroll or stock needs other money.
Commercial equity loans, if you own commercial property
A commercial equity loan or line lets you or your business borrow against what commercial property is worth minus what you still owe. The lender sizes it from an appraisal, checks that the business's cash flow covers the new payment and reads your credit as well, so a low score can still narrow the choices. The equity gives the lender something besides the score to rely on. Appraisal and title work commonly take weeks, so this suits a larger need you can plan around.
Consolidation, if stacked advances caused the trouble
Sometimes the credit trouble and the cash trouble share a cause, which is several advances pulling on one account until other bills slip. Consolidation replaces those advances with one new facility. The existing funders are paid off directly by the new one, the daily debits stop, and you make one weekly or monthly payment over a longer term, which lowers what leaves the account each week. The total you repay may not go down, because you are paying for more time. Our guide to MCA consolidation works through the numbers and lists what to gather first.
Lines of credit, which put more weight on your credit
A line of credit up to $2,000,000 lets you draw what you need and repay weekly or monthly on what you have drawn, with offers in one to two business days. Funders look at revenue here too, but they put more weight on credit than they do for an advance, and fair credit or better opens more lines and larger limits. With a score in the 500s the choices are usually few. FICO's fair range starts at 580, which is only 40 above a 540 score, and that makes a line a reasonable target for your next round of funding.
Bank loans through our partners, which want strong credit
Bank loans through our partners come with long terms and monthly payments, and the partner sets the terms. They usually want strong credit along with two to three years of tax returns, a personal financial statement and a debt schedule, and they take weeks. A low score usually means waiting on these, and the rebuilding steps further down are how you shorten the wait.
As general information, the SBA lists credit history among the key eligibility factors for 7(a) loans, and its microloan program goes up to $50,000 through nonprofit intermediaries, which make the credit decisions and set the terms.
Business loans for bad credit: a worked example at a 540 score
The figures below are an example only, not a quote or the terms of any funder. Say a heating and air conditioning company has operated for seven years, deposits about $70,000 a month and has no open advances. The owner's personal score is 540 after a run of late payments on personal cards, which FICO calls poor and the Fed's survey rates high credit risk, and a bank has already said no. The company needs $40,000 for parts and two new technicians before the busy season, and it needs a $50,000 service van.
| Example | Revenue-based financing | Equipment financing |
|---|---|---|
| What it pays for | Parts and two new technicians | The service van |
| Amount | $40,000 received | $40,000 financed, after $10,000 down from the company's cash |
| Pricing | Factor rate of 1.40 | 18% interest over 48 months |
| Total repaid | $56,000 | $56,400 |
| Cost in dollars | $16,000 | $16,400 |
| Payment | $400 each business day for 140 business days | $1,175 a month |
In a month with 21 business days, the advance takes $8,400 and the van $1,175, so $9,575 leaves the account, or about 14% of deposits. The advance clears in under seven months, and the van financing runs for four years. A line of credit or a long-term loan is unlikely on this file today, so these two products cover the need now.
Now run the same $40,000 advance at an example factor rate of 1.30, the kind of price a stronger file might see. The total payback falls to $52,000, which is $4,000 less. In this example the score costs $4,000, which gives the owner a dollar figure for the rebuilding work below.
What raises the odds with a low score
None of this guarantees an offer, but each step gives a funder something to rely on besides the score.
- Tell us what caused the score, in a sentence or two. A medical bill from three years ago reads differently from late payments last month, and FICO says the effect of past problems fades as time passes and good payments appear.
- Bring past-due accounts current before you apply if you can.
- Bring collateral or a down payment when you have one, such as cash toward the equipment or equity in a commercial building.
- Ask for what your deposits support. A smaller first advance paid on time leaves a record on your statements for the next funder to read when you ask for a renewal.
The funders we work with generally look for about a year in business and about $20,000 a month in deposits. If you are not there yet, apply anyway. Some funders work with newer or smaller businesses, and we will tell you what is realistic.
How to rebuild your credit while you are funded
Most advances are not reported to the personal credit bureaus as installment debt, so on-time payments generally will not raise your score by themselves. The score moves on your other accounts. FICO's guide to improving your score puts payment history at 35% of the calculation and amounts owed at 30%, so start with those two.
- Pull your reports for free at AnnualCreditReport.com, the site the FTC names as authorized for free annual reports, and dispute any mistakes.
- Pay every personal account on time, with automatic payments if that helps, because FICO says even a payment reported 30 days past due can significantly affect your score.
- Pay down credit card balances as cash allows, and leave unused cards open, since closing them reduces your available credit.
Expect gradual progress. FICO says paying off a collection does not remove it from your report, where it stays for seven years. Keep the advance current as well, because a default can lead to collections or a court judgment, and those do affect credit. If a payment starts to look hard, ask the funder about the reconciliation terms in your contract before you miss one. For the business's own file, see our guide on how to build business credit. As the score climbs, ask about a line of credit first and bank loans after that.
How to spot an advance-fee scam
The FTC says advance-fee loan scams target people who have bad credit or trouble getting a loan. The ads promise credit regardless of your history, with lines like "Bad credit? No problem", and then ask for a fee before any money arrives, often called processing, insurance or paperwork. The FTC calls any up-front fee a lender wants before granting the loan a cue to walk away. Real lenders can charge an application or appraisal fee, but nobody legitimate will say a fee guarantees a loan, and a real funder checks your file before it makes an offer. There is nothing to pay to apply or to see offers through us. You can report a scam at ReportFraud.ftc.gov.
How to apply with a low score
Start with the short application and four months of business bank statements as PDFs. Getting matched does not need a hard credit pull, since most funders prequalify from bank statements and a soft pull, and our guide to business loans with no credit check explains the difference. A funder may run a hard pull in final underwriting, and you know before it happens. Your file goes to the funders in our network whose requirements fit it, the offers come back side by side, and we go through the amount, the cost, the payment and the term with you before anything is signed. To talk through your score and statements first, call (818) 351-0225.
Frequently asked questions
Can I get a business loan with low credit?
Yes, a low credit score usually narrows your options without closing them, and revenue-based financing and equipment financing count it least, though every funder sets its own requirements and nobody can promise an offer.
What credit score do you need for a business loan?
No single minimum applies to every lender, and on our application any personal score from 500 up is reviewed, while lines of credit open up more at 580 or better and bank loans usually want strong credit.
What if my credit score is under 500?
You can still finish our application and we will tell you what is realistic, although few funders review files at that level and the ones who do want strong, steady deposits and little other advance debt.
How much can I get with bad credit?
The amount depends on your deposits and the product, with revenue-based financing running from $5,000 to $2,000,000 and equipment financing up to $500,000, and a low score usually means a smaller first advance compared with your monthly deposits.
Will a bad credit business loan help my credit score?
Most merchant cash advances are not reported to the personal credit bureaus as installment debt, so the payments generally will not raise your score by themselves, and what moves it is paying personal accounts on time and paying down card balances.
