Small business owners seeking loans are often turned away by traditional financial institutions, such as banks, especially when they have poor credit -- defined by FICO as a score between 300 and 629. Bad credit is generally indicative of improperly managed finances in the past, and are usually a pretty fair indicator of a continuance of these decisions in the future. 

A number of alternative lenders, however, do offer loans to businesses owned by people with poor credit. These lenders focus more attention on other indicators, such as the operating history and general financial strength of the business. It's important to consider, however, that the lower your credit score, the more likely it is that your APR will be higher, which includes your interest rate and all other related fees. Consider, as well, that if the reason your business needs incoming cash flow is due to a large number of unpaid invoices from reliable customers, an alternative to a loan might be invoice factoring

If you do decide that your best financing option is a loan, we've compiled a list of lenders that can help. All of these lenders are likely to accept those with poor credit provided they meet other stipulations.

Top 3 Best Small Business Loans for Bad Credit

Our Partner
9.2 / 10

This online lender provides loans between $1,000 and $100,000, with no minimum credit score or revenue. When approved, funding is accessible very quickly, and fees are waived if repayment occurs between 12 and 24 weeks. They do require the use of compatible online accounting software, such as FreshBooks or QuickBooks, and loans can be quite expensive, (APRs between 16.4% and 76.5%). FundBox connects directly to your bank account or accounting software to determine the financial health of your company. This is how they circumvent a low credit score. 

Our Partner
9.2 / 10

If you need fast access to cash, Kabbage is a great alternative for businesses seeking working capital of up to $150,000. Though the lender doesn't require a minimum credit score, their borrowers average a score of at least 500 or higher. They do ask for a minimum of $50,000 in annual revenue, and the use of a business checking, bookkeeping software, or online payment platform. There are some disadvantages, however, as their APRs are quite costly, (between 24% and 99%). They also offer also little benefit for early repayment.

Our Partner
9.0 / 10

Torro puts borrowers in contact with dozens of small business lenders, brokers, and private investors offering low rate loans with affordable payments for every type of credit: poor, good, and excellent. Their application process is simple and quick, without any asset verification, no business appraisal, and little to no paperwork. They excel particularly in the startup loan arena, where they divide the types of financing between loans for documented ventures and funding options for idea-based ventures. Although the company will work with bad credit borrowers, remember that this will likely translate into higher APRs and fees. 

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