Where to Find Business Loans for Bad Credit

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  • No collateral requirement
  • Payment schedule tailored to your cash flow
  • Up to 2-year term length
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Bad Credit Business Loans

Working capital for owners with bad personal credit.

Getting a Small Business Loan with Low Personal Credit

Running a small business takes ambition and a lot of gumption. Small businesses comprise 99.9% of U.S. businesses, which proves that entrepreneurs are the backbone of the American dream. At Clarify, we’re committed to helping business owners get the working capital they need to grow their companies.

While personal credit score is a factor in securing a loan, we believe it shouldn’t be the only deciding factor. We understand that your credit rating doesn’t define you or your business.

This is why we take a holistic view of your finances and business model to get you approved at competitive APRs. Clarify Capital works with more than 75 lenders, and we can help you get approved and funded within 24 to 48 hours on our marketplace.

What Lenders Consider When Approving a Bad Credit Business Loan

For most lenders, a bad credit score ranges from 450 to 600. Traditional banks and institutions will rarely fund owners with these credit scores — but you’re in luck! Our network of alternative lenders looks at several other factors to approve your business loan application.

Here are some factors that they weigh regardless of your credit report:

Gross Monthly Revenue

Most lenders like to see you generating at least $10,000 in monthly gross revenue. They use your income to calculate an approved loan amount.

Outstanding Debt

To make the approval process faster, make sure you know how much outstanding debt you currently owe. This information is helpful because lenders also look at your debt-to-income ratio.

Time in Business

At Clarify, we recommend that your business has been operational for at least six months. On average, companies that have been in business for more than five years have the highest rate of approval with good interest rates. That’s why the longer you’ve been in business, the better.

Operating Cash Flow

Be ready with the documents needed for the application process. Make sure you have the last three months of your business bank account statements handy. Business lenders will ask to see your most recent bank statements to verify your operating cash flow.

Business Credit History

If you have established business credit in the past, that can help too. Although your personal creditworthiness matters, it’s more important if you can show that your company’s cash flow is stable and your business can pay its loans. Having a solid business plan helps, as well.


Is your business profitable or showing a positive trend toward profitability month over month? Your dedicated Clarify adviser can help point you in the right direction so you can get the best financial solution for your company.

Best Business Loans For Bad Credit Scores

At Clarify, we believe that a low credit score shouldn’t stop you from business success. So, we work with you to identify a loan option that fits your needs and unique cash flow requirements.

Here are the best types of loans for borrowers with less-than-stellar personal credit ratings.

1. Short Term Business Loan

Term loans are a type of business financing with short repayment terms ranging from six months to two years. You receive a lump-sum amount that you repay through fixed, regular payments. A short-term loan is an excellent option for new businesses or startups that may not qualify to receive funding from traditional lenders like banks or credit unions.

With Clarify, you can get short-term loans with APRs (annual percentage rates) as low as 7% without any collateral. The term loans also have low credit score requirements. As long as your business has been operational for at least six months and you can prove that you generate over $10,000 in monthly income or have at least $120,000 in annual revenue, we can get you pre-approved.

Apply for Short Term Loan

2. Business Line of Credit

A line of credit works much like a business credit card. You get a set credit limit, but you only make payments or get charged interest for the amount you borrow. Unlike a credit card, a line of credit has a much lower interest rate and doesn’t have any prepayment penalties. It’s also a great tool to improve your business credit score over time.

Most business owners use this type of funding to cover working capital, such as buying inventory or paying payroll. But the main advantage of a line of credit is its flexibility — you can use it however or whenever your business needs it.

Apply for Line of Credit

3. Invoice Financing

Invoice financing is a way for businesses to borrow money using accounts receivable. If you have outstanding invoices, it’s an excellent funding option. The invoices act as collateral, so your credit score isn’t a factor in getting approved.

Apply for Invoice Financing

4. Equipment Financing

Just like a traditional car loan, equipment financing provides capital to purchase new or used equipment. Whether you’re a trucker, restaurant owner, or construction company, an equipment loan can help you grow your business or replace old assets.

Apply for Equipment Financing

Is a Business Loan a Good Idea If You Have Bad Credit?

Yes, a business loan is still a good idea even if you have bad credit. When you run a business, you manage your capital to make profits. At the same time, you’re also looking for opportunities to grow. Since you need capital to make profits and expand, a loan is sometimes necessary.

At Clarify, we understand that bad personal credit is not always the result of bad financial habits. That’s why understanding your loan options is important — so you can take advantage of available resources that can help you manage and grow your business.

Top Uses for Bad Credit Loans

At Clarify, we believe that low credit scores shouldn’t be a barrier to reaching your business goals. Here are some ways borrowers use loans to meet their business needs.

Slow Periods:

During slow periods, you might experience a drop in sales. A business loan, whether it’s through invoice factoring or a short-term business loan, can provide an infusion of working capital to help offset a temporary fluctuation in sales.

COVID-19 Relief:

We understand how difficult it’s been for small businesses nationwide. If your business has seen a downturn in sales due to the pandemic, Clarify can help you get the funds needed to keep your company going.

Inventory & Supplies:

Many businesses get loans to purchase inventory and supplies to ensure they can meet customer demands and keep operations running smoothly. Some business owners also use their funds to buy in bulk and save money that way.

Equipment Needs:

We understand that you may need equipment to get the job done. That’s why we offer financing solutions like working capital loans and equipment financing to help you purchase new or used equipment. These types of financing are also available for borrowers with low credit scores.

Payroll & Taxes

Payroll and taxes are unavoidable expenses every business incurs. If you’re low on funds, loans can help ensure you can meet your financial obligations to your employees and the government without delay.


Refinance existing debt with loan terms that work for you. Whether you want to pay off your loans with high interest rates or have more flexibility with your payment structure, we have you covered.

Bad Credit Business Loan FAQs

Clarify recommends that borrowers have a credit score of at least 550. If your credit score is below 550, however, don’t let that stop you from considering business loans as a financing option. Contact us directly and speak to a Clarify adviser to discuss your business funding options.
At Clarify, we recommend that businesses applying for loans have an average monthly income of $10,000 for easy approval with online lenders. However, if your business earns less than $10,000 a month, it doesn’t mean you can’t get a loan. Please contact us and talk to a Clarify adviser directly so we can help you strengthen your application.
Clarify doesn’t require a down payment for business loan approval. You don’t need collateral for some small business loans, either.
With Clarify, small business owners can get approved for loans up to $750,000 (the actual amount you may qualify for varies depending on several factors). We work with more than 75 lenders that also have different eligibility requirements.

They’ll look at your business income, how long your business has been operational, and your credit history. Some will also consider the stability and profitability of your business. Contact us directly for any questions, as a Clarify adviser is always ready to discuss available options for you.

Types of business owners we've approved for business loans

What you need to get approved for a low personal credit loan

  • keyboard_arrow_right Company has been in business for 6+ months
  • keyboard_arrow_right Generates $10,000+ per month in revenue
  • keyboard_arrow_right Can provide last 3 months of bank statements

Loan advisors that help you get funded regardless of credit rating

When you choose Clarify, we consider you family -- and work with you through the ups and downs of running your small business.Manufacturing Financing Team

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Bad credit loan

"Bryan provided me with a loan to get through my slower season. He took the time to really understand my business and worked with me on my projections for the next 12 months. Together, we figured out exactly how much funding I needed. I’m very thankful the time that Clarify dedicated to my company."

5-star Trustpilot reviews5-star Trustpilot ratingClarify Capital is rated 10/10 based on 225 reviews on Trustpilot
Ready To Grow Your Business?

Get instant pre-approval for a small business loan today and have money in your account in as little as one day! We work with all borrowers, including business owners with poor credit scores. Prequalify through the online application, which only takes two minutes, or talk to a Clarify adviser to discuss your options.