Startup Business Loans For Bad Credit Guaranteed

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The majority of the items featured here are provided by our partners, who pay us. This could affect the products we write about as well as where and how they appear on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our affiliates, and this is how we get paid.

How much do you need?

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We’ll begin by asking you a few questions to better understand the particular requirements of your business.

Our team will consult you on the next steps once we find your personal matches.

Here are 5 startup business loans bad credit

Max loan amount

Min. credit score

Here are 5 startup business loans bad credit

Best for Short-term business loan for startups with bad credit

Best business credit lines for new businesses with poor credit

Best business credit line for new businesses with fair credit

Best for Microloans for startups with bad credit

Best for Equipment financing for startups with bad credit

Short-term business loan for startups with bad credit

For urgent financial requirements and specific, one-time purchases, a short-term business loan may be a good option.

Fora Financial – Online term loan

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Cash can be available quickly.

Get a discount for prepaying.

No collateral required.

Charges a factor rate which makes it more difficult to compare costs to other lenders.

Minimum business age and revenue requirements apply.

Longest loan term is 15 months.

Qualifications:

In business for at least six months.

At least $12,000 in gross sales per month.

No open bankruptcies or dismissed bankruptcies within the past year.

Business line of credit for startups with bad credit

Business credit lines are ideal for handling cash flow and covering unforeseen expenses. Lines of credit are more flexible than business term loans.

Fundbox – Line of credit

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Financing available within one business day after approval.

Simple application with minimal documentation required.

Startup-friendly—accepts borrowers with a minimum of six months in business.

Low minimum credit score requirement.

No prepayment penalties, account maintenance fees or inactivity fees.

Rates are high compared to traditional banks.

May require personal guarantee.

Can’t be used to build business credit.

Weekly repayments required over a short term (maximum of 24 weeks).

Qualifications:

Minimum credit score: 600.

Minimum time in business: 6 months.

Minimum annual revenue: $100,000.

May fund quickly

Business line of credit for startups with fair credit

If your credit score is 625 or higher, which is considered to be “bad credit,” you might be eligible for a larger line of credit, such as borrowing up to $250,000 from Bluevine.

Bluevine – Line of credit

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Cash can be available within 12 to 24 hours.

Multiple term lengths for different financing needs.

Low minimum credit score requirement.

Startup-friendly; accepts borrowers with a minimum of six months in business.

May require weekly repayments.

Requires personal guarantee.

Not available in North Dakota, South Dakota or Nevada.

Rates can be high compared to traditional lenders.

Qualifications:

Minimum credit score: 625.

Minimum time in business: 6 months.

Minimum annual revenue: $120,000.

May fund quickly

Microloans for startups with bad credit

Microlenders and nonprofit organizations may be willing to work with new businesses with poor credit and can provide loans up to $50,000. In fiscal year 2021, startups received 36. 9% of the SBA microloans issued.

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Less strict eligibility requirements than other government loans.

Available from nonprofit lenders.

Personal guarantee is required.

Collateral is typically required.

Small borrowing maximum.

Qualifications:

Be a U.S. business.

Financial qualifications determined by individual lender.

Equipment financing for startups with bad credit

Loans may be available to borrowers with bad credit because equipment financing typically uses the piece of equipment you’re buying as collateral. But startups may need to pay more for financing.

Triton Capital – Equipment financing

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Can fund within one to two business days.

No prepayment penalty.

Flexible repayment options: monthly, quarterly, annually or semi-annually.

Typically requires a personal guarantee and UCC lien.

Requires high minimum annual revenue.

Qualifications:

Minimum credit score: 600.

Minimum time in business: Two years, but startups may be eligible (with higher costs).

Minimum annual revenue: $250,000.

How Much Do You Need?

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What is a bad credit score?

Business and personal bank statements.

Business and personal tax returns.

Business financial statements, such as a profit and loss statement or a balance sheet.

Alternatives for bad-credit borrowers

Personal business loans. If your startup isn’t eligible for any form of financing, you could consider a personal loan. These loans are credit-dependent, but options are available for borrowers with bad credit. And lenders only consider your personal financial profile, not your business history, when evaluating your application.

Business credit cards. If your credit is at the high end of what’s considered a bad score (below 630), you may be able to qualify for a business credit card. You can apply for a business credit card as a true startup — before you’ve generated any revenue at all — though card issuers may give more weight to your personal finances in those cases.

Crowdfunding. If you’re still preparing to launch your business idea, you might try raising funds with crowdfunding — where donors receive a product or service related to your business in exchange for their contribution.

Small business grants. Instead of debt-based financing, you might apply for small-business grants that you don’t have to repay. Applying for grants can be competitive and time-consuming, but the payoff can be worth it if you secure one. Plus, there are startup business grant options. Grant issuers want to support businesses that will last, so they typically look for evidence that a business idea will succeed.

Selling equity. Another alternative to debt financing is selling equity — or shares of your business — to investors, friends or family. This is typically a good option for tech businesses and fast-growing startups, but other businesses might use an equity crowdfunding platform to reach their funding goal. Investors will probably want to review your business plan and may be more likely to invest if you can show strong early results.

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The Associated Press, U.S. News & World Report, and NerdWallet have all highlighted the work of Ryan Lane, an assistant assigning editor. S. News & World Report and USA Today.

A writer for small businesses, Randa Kriss joined NerdWallet in 2020. Previously, she was a writer for Fundera, where she wrote about a variety of small-business issues, such as banking and loan products. The Washington Post, The Associated Press, and Nasdaq, among others, have all featured her work. At Iona College, Randa received a bachelor’s degree in both English and Spanish. Email: rkriss@nerdwallet. com.

FAQ

Can I get a loan with bad credit to start a business?

Bad personal credit can make getting a business loan challenging, but it’s not impossible. Even though some lenders focus on startups and less creditworthy borrowers, some loan types are better suited to business owners with poor personal credit, though they frequently have higher interest rates.

Can I get a business loan with a 500 credit score?

Even with poor credit, you can still qualify for a small business loan. This is due to the fact that your business’s overall financial health is more important than your credit score. A minimum credit score of 500, six months of business operation, and more than $30,000 in annual revenue are common requirements from lenders.

Can I get a business loan with a 400 credit score?

For loans to businesses with bad credit, there is no set minimum credit score requirement. Some lenders might have a 600 minimum requirement, while others might have a 500 minimum.

Can I get a PPP loan with bad credit?

No, you can obtain a PPP loan without having a high credit score. Your eligibility for a PPP loan is not influenced by your credit score. To ensure you’re accurately representing yourself and your business in the application, some lenders, though, will check your credit.