Businessing Magazine Logo Businessing Magazine Logo

Bad Credit Small Business Loans and Business Loan Rates

Bad Credit Small Business Loans and Business Loan Rates

A loan is a viable financing method for any business, but what happens if you have a bad credit score? Let’s say a personal credit score of about 629 or less?

Well, there’s good news for you. There are a variety of options for you to choose from, even with the poorest credit score, thanks to the growth of the lending industry, which have brought about alternative lending options.

Alternative lending has not always been available. About a few decades ago, it would have nearly been impossible for business owners with a score below 600 to access loans.

However, you have to be careful before collecting bad credit business loans because they are difficult to pay back. They offer lenders limited freedom, as they come with high-interest rates, short repayment terms, and frequent payments. If not correctly handled, they could cause more harm than good to your business.

If you are looking for loans and have a bad credit score, take your time to investigate the terms and conditions. Don’t make a poor decision in your haste; find out the most affordable options. However, bad credit business loans might be the saving grace your business has been in desperate need of, so don’t hesitate to take bad credit business loans when it is necessary.

Over the years, the lending industry has provided business owners with bad credit loans in different shapes, sizes, and structures. This article will give details on how business owners who are still building their credit score can find alternative small business loans and their rates.

Short Term Business Loans for Bad Credit

If you have bad credit and you still need a loan with a straightforward structure, short term loans would be a great option.

Short term loans span between 3 to 18 months, and the payback could be daily or weekly, depending on the agreement. However, they are very expensive to maintain and have a high chance of affecting your business negatively with a high APR. The regular payments will also affect your cash flow.

Despite these setbacks, a short term loan for bad credit is still a great option because it is easily accessible, and will give your business extra funding within a short period.

If your credit score is over 500, then you are qualified for short term bad credit business loans.

Short-Term Business Lines of Credit for Bad Credit

This is also another good option for business owners with bad credit. Business lines of credit give accessible and flexible working capital through a revolving credit limit. This loan has a repayment term of fewer than eighteen months. Business owners with bad credit will find a short-term business line of credit a beneficial means of financing their business.

This loan option comes with higher APR and offers lower credit limit, and is a better option than long term business line of credit. The best part is this loan option offers stellar bad credit business financing. This makes it even better than other short-term bad credit business loans.

Invoice Financing for Bad Credit

If you have some form of collateral, lenders might be tempted to overlook your bad debt. Collateral here don’t mean house or car. With invoice financing, borrowers will be able to access advances for outstanding secured invoices. A secured invoice will serve as alternative collateral for lenders with bad personal credit. This means you don’t need to offer up your property; a secured invoice will do the trick.

Through invoice financing, you can secure a cash advance equal to about 85% of the outstanding invoice amount. This transaction usually has a flat fee of about 3%, and 1% for each week the invoice remains outstanding.

Business Credit Card for Bad Credit

Business owners with bad credit can look to credit cards for a solution. A business credit card is an alternative option if you are looking for extra money to finance your business. It will also help with other business expenses.

If you handle your business credit card well, you’ll soon have access to better business credit card options and business loans.


If you have bad credit, you can still get a loan to facilitate the running of your business. Getting bad credit loan has been made easier than every before. Thanks to the various alternative lending platforms, you don’t have to rely on banks solely.

short url:

by Rebecca Jones // Contributor to Businessing Magazine.

Opinions expressed by contributors are their own.