Best Small Business Loans for Bad Credit in 2023

We reviewed and ranked the top small business loans for bad credit. We set out to find the best one by thoroughly researching five of the most popular lenders: Ondeck, Kiva, Fundbox, Accion, and Lendio. Knowing the top small business loans for bad credit makes it possible to get funding fast, even if you have less than perfect credit.

Our Approach:

Choosing the best business loan for businesses with bad credit comes down to 3 things:

1. Needs of your business
2. If you can afford the loan
3. Whether or not your business meets loan requirements

In this business loan review, we’ll look at some of the top small business loans for bad credit and share what makes them the right choice. We’ll explore the financing details of each loan, along with pros, cons, and more. By the time you finish reading this review, you’ll know which business loan is best for your credit situation.

Our Top 5 Business Loans for Bad Credit:

1. OnDeck offers the best overall loans for bad credit because they have low credit score requirements and same-day fast funding.
2. Kiva is the best microlender for bad credit because they use crowdsourcing to eliminate risk for investors.
3. Fundbox is best for low revenue businesses with bad credit because they have small revenue requirements.
4. Accion is best for businesses needing smaller loans with bad credit to fund smaller projects.
5. Lendio is best for time-constrained business owners with bad credit because Lendio works with a network of lenders.

OnDeck offers term loans and lines of credit for businesses of any size but primarily works with startup businesses with no established business credit. They offer loans up to $50,000 and interest rates that start at 10% per year.

The main advantage to OnDeck is that you only need a 600 credit score to get approved, so if your business credit is bad, you still qualify.

Here is a quick summary of OnDeck business loans:

• Term Loan
  
  • Lowest rate: 10%
  • Loan sizes up to: $50,000
• Line of Credit
  
  • Lowest rate: 10%
  • Loan sizes up to: $50,000

OnDeck Business Loan Qualifications:

• 600+ Equifax and Experian credit score
• 2+ years in business preferred
• Strong financials

Pros

• Low credit score okay
• Money can be used for most business expenses
• Free up your cash
• Transparent fees
• Easy approval
• Don’t need collateral
• Help you build business credit
• Tailored loans
• Loyalty benefits

Cons

• Need an established business credit to qualify
• High interest rates compared to other lenders

Microloans are small loans used for specific purposes to help businesses stimulate growth. These loans are useful when a business owner needs a small amount of capital to quickly generate business income in order to manage and grow the business.

Kiva is our favorite microlender for businesses with bad credit because they utilize the power of crowdsourcing to help business owners gain backing from their peers and a huge investor pool.

If bad credit makes you feel helpless, you might try Kiva. They work one-on-one with you to give you support, so you can get the funding your business needs to grow and thrive. The best part, as a mission-driven nonprofit, they don’t charge any interest on their loans.

Here is a quick summary of Kiva business loans:

• Microloan
  
  • Lowest rate: 0%
  • Loan sizes up to: $15,000

Kiva Business Loan Qualifications:

To qualify for a Kiva business loan, you are required to:

• Conduct business in the U.S.
• Be at least 18 years old
• Be using the loan for business purposes

Pros

• Crowdsourcing mitigates risk for investors
• Money can be used for any business expense.
• Zero interest loan
• Repayable over 36 months
• Stimulate growth
• Free up cash flow
• Zero interest loan
• Funds can be used for anything.

Cons

• You’re responsible for helping the loan get funded.
• Requires time
• Smaller loans
• Kiva doesn’t report to credit bureaus.
• If your loan is only partially funded, you get nothing.

Fundbox is the best quick cash lender for businesses with bad credit. Sometimes businesses need money fast to take advantage of opportunities that don’t come around often (if ever). Businesses with bad credit may be at a disadvantage since getting funding with bad credit is often a challenge. Fundbox lends to businesses with less than perfect credit and makes funds available practically on demand.

Fundbox offers line of credit loans, which are useful because they are easy to qualify for, useful for taking care of short-term business needs, and offer flexible terms.

Here is a quick summary of Fundbox business loans:

• Line of Credit
  
  • Lowest rate: 4.66%
  • Loan sizes up to: $100,000

Fundbox Business Loan Qualifications:

• 500+ credit score
• 3+ months in business
• $25,000 in annual revenue

Pros

• Larger credit limits
• Free up your cash
• Only fund what you want
• Transparent fees
• Easy approval
• Funds available on demand
• Access to a revolving credit line
• Only pay for what you use
• No early repayment penalty
• Auto debit from your bank account

Cons

• Not a long term finance solution
• No early payment incentive
• Pay most of the interest on the front end of the loan

Accion lends out as little as $300 to businesses with bad credit history. Most lenders require businesses to borrow thousands of dollars, possibly locking them up in the debt trap, but Accion will let you borrow small amounts that are more affordable. Borrowing a little capital and repaying it is one great way to improve your credit for when you want to borrow large amounts of capital in the future.

Some of the businesses Accion lends money to include:

• Loans for women-owned businesses
• Loans for minority-owned businesses
• Loans for food and beverage businesses
• Loans for startup businesses
• Loans for small businesses
• Loans for veteran-owned businesses
• Business loans for people with disabilities
• Loans for green businesses

Here is a quick summary of Accion business loans:

• Term Loan
  
  • Lowest rate: 8.99%
  • Loan sizes up to: $50,000

Accion Business Loan Qualifications:

• 576+ FICO score
• An alternative source of income for repaying the loan
• No personal debts
• The loan amount will depend solely on your business needs

Pros

• $300 loan minimums
• Just 576+ FICO to qualify for a term loan
• Money can be used for any business expense
• Free up your cash
• Transparent fees
• Easy approval in 5-10 days
• Don’t need collateral

Cons

• Need to be in business two years to qualify for $50,000
• No bankruptcy for 24 months
• No more than $3,000 in past due debts
• Must demonstrate you can repay the loan

Lendio helps time-constrained business owners get approved for business loans by working with a network of lenders rather than lending out capital directly. You fill out one application and submit your business docs. From there, Lendio’s partners compete for your business. Even if you have bad credit, Lendio can often find a lender that will meet your needs and get your business funded.

Here is a quick summary of Lendio business loans:

Lendio is not actually a lender themselves, but they do partner with approximately 15 private lenders that offer every type of business loan available. Lendio helps any type of business get funding regardless of credit.

Here’s some information to help you decide if Lendio is the right place to apply for a loan:

• Interest rates: Varies depending on the type of loan, business needs, and other factors. There are no set minimums.
• Average loan size: $96,000

Lendio Business Loan Qualifications:

• 500+ credit score
• 2+ years in business preferred
• Six months bank statements
• Business checking account

Pros

• Low credit score approval
• Money can be used for any business expense
• Free up your cash
• Transparent fees
• Easy, fast approval
• Don’t need collateral
• Average loan is $96,000
• Get better rates as lenders are competing for your business
• Great customer support

Cons

• Six months of bank statements
• Two years of tax returns
• Soft credit check before being approved
• Fewer lending partners than prior to COVID-19

Businesses with poor credit often find financing a slippery slope, given most lenders require a high credit rating to qualify for a loan. These lenders we’ve presented are the best for businesses with bad credit because they work with businesses of varying needs to help them succeed.

The best on this list is OnDeck, given they don’t require collateral and can get you funded up to $50,000 with relatively low rates, think 10%. They also get you funded fast with less hassle and more favorable terms.