Credit Score
Credit Score

How to Find Small Business Loans with Bad Credit Score

When you apply for loan or the trust level your potential lenders have on you on repaying the fund you have borrowed depends upon the scale from acquiring a very bad credit to outstanding credit. Bad credit implies no lender will fund you while good credit lets you acquire loan easily from banks and lender companies.


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Bad credit describes the borrower’s record of unable to make payments on the fund agreements which eventually results in refusal for new loan. In simple terms it means the borrower couldn’t pay the funds and other obligations on stipulated time period. Credit bureaus collect the financial status history and jot it in the report.

Every financial bureau computes FICO score depending upon the available financial status details.  The Fair Isaac Corporation has developed software and algorithms for calculating scores. The score ranges from 300 to 850 where 650 to 670 is considered for rejection of small business loan applications.

What to do for getting a business loan with bad score?

Every issue has a solution and similarly for this too! There are alternative lender who offer several options for spotty credit history. Many of them require a financial score between 500 to 600 and few don’t have any minimum score requirement. Such lender focus on business strengths than financial status.

What borrowers should consider before selecting a finance option:

  • Lower the score higher annual percentage rate. It also includes interest rates along with fees on loan.
  • Easy to get fund if you have unpaid customer invoices via invoice factoring or financing. Approval depends upon the invoices value.
  • Or wait and work on your personal financial score to able to qualify for better loan rates.

Best bad credit loans options:

  • For new businesses: If your business is just a year old then financing options include secured personal credit cards as well as business credit cards.
  • For business owners with credit card score of at least 500: You can avail working capital up to $250,000.
  • With 600 score: You can reach to Fundlime who can provide $250,000 with minimum score requirement.
  • If you have unpaid customer invoices: Fundlime provide invoice financing options where customer invoices is a main factor.

Bottom line: Compare all the above options before choosing the final option. If none of them works well for you then connect with our experts. We have a list of small business loans where our recommendations are based on lenders market scope and record. We also analyse your requirements along with other factors.


Priyanka Dwivedi is Editor-in-Chief at Fundlime. Specializing in financial advice for small business owners. Beyond her deep knowledge of small business loan and tips, she would love to help match your business with the best loan option that benefits you most!

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