Business Financing Options for People with Bad Credit

As explained by FICO, bad credit is a credit score of 300 to 629. Generally, bad credit is a typical reason that creditors turn down small-business loan applications. Consumers with bad credit scores are deemed at higher risk or more chances of defaulting on a loan.

Regardless, borrowers with bad credit still have financing options. It’s known and obvious that taking out a traditional bank loan can be very hard if you have bad credit. But the good news is that alternative or online lenders offer several business financing options for those with bad credit.

Some of these creditors require no credit score and consider factors like length of time in business and business revenue.

In this post, we’ve listed some of the business financing options for borrowers with bad credit. Read on to know more!

Merchant Cash Advance

Technically speaking, merchant cash advances are not a loan. To put it simply, it is a cash advance on your payment card sales in the future. Because of this, a merchant cash advance is, without a doubt, fitting for Business to Consumer retail operations such as hardware stores, car repair shops, restaurants, and so on. 

At the end of every business day, take note that a small portion of your daily sales will be withdrawn and employed to the advance balance. In particular, it means that the total borrowing cost does not get larger if it takes a long time to clear the balance than anticipated.

Small Business Loans

Small business loans are long-term or straightforward short financing options with regular, fixed monthly payments. This funding option is also unsecured. Meaning, you do not have to pledge your personal assets or business as collateral. 

No matter your precedence or choice might be, the government can find the best working capital loan for any borrower, whatever the credit score. If a business or company needs financing right away to pay for large expenses, borrowers with bad credit can turn to online lenders, like Glob Loans, for easy and fast options.

Due to the easier requirements, faster funding, and flexible terms compared to loans offered by conventional creditors, small business loans make it very simple to obtain funding options with better terms that help organizations from almost every industry to achieve any goal, specifically faults or flaws on financial histories and credit histories.

Equipment Financing

This type of funding option allows borrowers to buy the equipment right away; for example, technology, tools, machines, and more. In particular, the equipment that you need to increase profitability, onboard more customers, improve competitive advantage, and boost efficiency. 

Equipment financing helps keep rates incredibly low. However, borrowers with bad credit will, for the most part, need to pay more interest. 

business equipment loans

Business Line Of Credit

A business line of credit is technically not a loan. However, most business owners take advantage of this funding option to cover temporary shortfalls and sudden expenses. The main advantages or upper hand of a business line of credit are the following:

  • Instant access to funding.
  • Interest is only added or included on the principal.
  • If the line of credit is revolving, then for future borrowing, repaid amounts are instantly available.

So, if you ever need fast money or find yourself needing immediate funding, then this funding option is the perfect loan for you. Borrowers with bad credit can leverage a business line of credit to get ready for unforeseen future expenses. 

Moreover, do you need to employ or recruit more staff to accommodate an increasing number of customers? If yes, then you may need more materials to leverage an unexpected opportunity. 

A business line of credit might be what your company needs to expand and progress because of its flexible repayment terms and quick access to funds. One of the best things about this funding option is that you only need to pay for what you took out. 

Inventory Financing

Just like equipment financing, this funding option allows borrowers to buy inventory. Alternatively, if you are a manufacturer, you can use inventory financing to purchase raw materials that are turned into finished goods. 

Inventory financing is particularly valuable and essential to franchisees, resellers, and channel partners that are contractually responsible always for sustaining minimum stock levels. Your products act as the security against or collateral for the loan.

Healthcare And Doctor Loans Financing

Healthcare and doctor loan financing are unsecured personal loans that do not need any collateral, such as your personal assets or business, to qualify. Many lenders provide specialized funding options for healthcare, dental, and medical professionals with any credit score. 

Through this kind of loan, medical professionals can simply connect gaps between purchasing new equipment, managing payroll, healthcare payments, hiring staff, or expanding the hospital — no matter the credit score. 

Healthcare And Doctor Loans Financing


If you only need money anywhere from $500 to $1000, then microloans are perfect for you. Nonprofit organizations usually offer microloans. This funding option is mainly aimed at business owners who operate socially responsible businesses or reside in disadvantaged communities. 

The goal of your business should align or line up with those of the nonprofit organization, for example, creating new jobs for those who are in poverty. Moreover, for microloans, bad credit is not a deal-breaker. 

Keep in mind that the creditor might need you to take business classes or get regular business counseling as a condition of approving your loan application.


Online lenders usually offer financing options for borrowers with bad credit. Most of these creditors require a credit score of at least 650. On the other hand, some creditors require no credit score or history at all. Further, other things that might be considered include your recent bankruptcies, time in business, and annual revenue. 

Borrowers need to think about several things before picking a funding option, such as a bad credit score might lead to higher interest rates. So, if you can improve your credit and wait for a bit longer, you might be eligible for more financing options at better rates.