A low credit score closes a lot of doors — but not all of them. If a bank has said no, the issue is usually that traditional lenders underwrite on personal credit first and business performance second. Revenue-based lenders work the other way around.
This guide covers what bad credit business loans and funding options actually look like, what you'll realistically qualify for, and how to get approved when your personal score is under 600.
Can you get a business loan with bad credit?
Yes — but the type of financing matters. Banks and most SBA loan programs generally want personal credit scores of 680 or higher. Alternative lenders and funders approve on different criteria: monthly revenue, bank activity and time in business. For those lenders, a score of 580 — or lower — is not automatically a rejection.
The most accessible options when your credit is a problem include:
- Merchant cash advances — lump-sum funding repaid from a percentage of daily sales.
- Revenue-based financing — similar structure, repaid as a share of monthly revenue.
- Invoice factoring / accounts receivable financing — advance against unpaid invoices.
- Equipment financing — the equipment itself acts as collateral.
- Business lines of credit from alternative lenders — smaller limits, revenue-based underwriting.
What credit score do you need for a small business loan?
It depends entirely on the lender. As a rough guide:
- 680+ — most bank term loans, SBA programs and the best rates.
- 600–680 — many online and alternative lenders will consider you.
- Below 600 — revenue-based funders, MCAs and equipment lenders remain options.
- No minimum — some funders focus almost entirely on revenue and bank volume.
Why revenue-based funding is the realistic route
When a lender funds against future revenue, your daily sales become the repayment. That's why a merchant cash advance or revenue-based financing deal is easier to get with bad credit — the funder's risk is tied to your cash flow, not your FICO score.
The trade-off is cost. Revenue-based funding carries a factor rate rather than an APR, and it is typically more expensive than a traditional loan. Use it for a purpose that generates revenue quickly — inventory, a big contract, payroll at a growth moment — rather than as a long-term financing solution.
How to improve your approval odds
- Show consistent deposits. Three to six months of clean, steady bank statements carry more weight than your score.
- Get 6–12 months of trading history. Most funders need at least six; a year is safer.
- Have tax returns and a P&L ready. Documented revenue beats verbal estimates.
- Be clear on your use of funds. Funders respond better to a defined need.
- Compare offers. Rates and terms vary widely — one application to multiple lenders, like merchant cash advance or same day business funding offers, shows you the range before you commit.
Questions to ask before you accept a bad credit business loan
- What is the factor rate or APR, and what does the total payback equal in dollars?
- Is repayment a fixed payment or a percentage of my daily revenue?
- Are there origination fees, prepayment penalties or daily ACH requirements?
- Can I see the full repayment schedule before signing?
A lender that can't answer all four clearly is worth walking away from — no matter how fast they promise to wire money.