High-Risk Business Loans

Getting Business Funding as a High-Risk Borrower

Operating a business is no easy feat. As your company grows, you can expect an increase in expenses. For high-risk borrowers, securing access to working capital can be a difficult but necessary part of achieving business success.

Fortunately, at Clarify Capital, we offer a wide variety of funding options for high-risk borrowers. While risk will always be a key factor that lenders consider, we believe it shouldn't define the borrower. After all, most small business owners and entrepreneurs take on some level of risk to build their empires.

If you've been turned away by traditional lenders, don't be discouraged. We work with borrowers who have bad credit, minimal credit history available, and work in “risky” industries.

Whatever your situation, Clarify is here to help make your dreams a reality. With a marketplace of 75+ lenders, competitive products, and a streamlined, fast approval process, we're experts in getting you the fast business loans you need to keep your business running at its best.

What Makes a Business High Risk?

A business is typically labeled “high risk” when traditional lenders view it as more likely to default based on credit history, revenue patterns, or industry type. This does not mean the business is unsuccessful — it simply means it falls outside rigid bank lending guidelines.

Common factors that may classify a business as high risk include:

• Bad or limited credit history. Business owners with low personal or business credit scores, past delinquencies, or prior bankruptcies may be denied by banks.

• Startups or newer businesses. Companies with little operating history or inconsistent early revenue often struggle to qualify for traditional financing.

• Seasonal or fluctuating revenue. Businesses such as landscaping, construction, retail, or tourism that experience strong seasonal swings may be considered higher risk.

• Industries labeled as high risk. Certain sectors face stricter lending scrutiny, including restaurants, construction, trucking, e-commerce, cannabis-related businesses, and gaming or gambling-adjacent companies.

• Inconsistent cash flow or recent revenue dips. Even profitable businesses can be viewed as high risk if recent bank statements show volatility.

• Prior loan denials from banks or SBA lenders. Many business owners turn to high-risk business loans after being declined elsewhere.

Types of High-Risk Business Loans

Finding the right small business loan for your company depends on your needs and business goals. We have a diverse selection of loan products, so you can choose what financing option makes sense for you. Compared to more traditional loans like bank loans or loans from credit unions, these types of loans from alternative lenders can get your business funded in just a few business days.

High-risk business loans put less focus on your creditworthiness, business plan, or business track record than other loans, including SBA loans. At Clarify, we're passionate about helping high-risk borrowers secure funding with favorable repayment terms.

Merchant Cash Advance

With a merchant cash advance (MCA), you exchange a portion of your future sales for working capital. This short-term loan type offers immediate access to funds. Common uses include bridging cash flow gaps and covering expenses when the unexpected happens.

• Apply for Merchant Cash Advance

Installment Loans

Term loans are the most popular type of funding. Borrowers receive a lump sum, which is paid back over time in fixed increments. If you've been in business for at least six months and your company generates over $10,000 in gross monthly revenue, a short-term business loan could be a great option for your business.

• Apply for Installment Loan

Equipment Financing

Equipment financing provides capital to purchase new or used machinery. A personal guarantee is not needed, which means your personal assets are never on the line. The equipment is used as security, so your personal assets stay protected.

• Apply for Equipment Financing

Invoice Factoring

If you have low credit or don't have an established credit history, invoice financing is a great loan option. The receivables of outstanding invoices are used as collateral, which means that borrowers with all types of credit can be approved. Many high-risk borrowers choose invoice factoring loans because credit is not a primary qualifier for funding.

• Apply for Invoice Factoring

What Criteria Do Lenders Look at for High-Risk Business Loans?

Several factors are considered when determining borrowing eligibility. The following list is meant to serve as a general guide to better understand what lenders consider before approving a loan. Our advisers are available to speak to you about your unique circumstances and business goals.

1. Monthly Revenue

Gross monthly revenue of at least $10,000 tends to be what most lenders look for. The amount of funds you're allotted will typically correlate with the monthly and annual revenue of your company.

2. Current Debt

Most lenders will want to know your debt-to-income (DTI) ratio. Ideal applicants have low amounts of debt relative to their earnings. Understanding how much outstanding debt you carry will help you get an idea of the loan offers you can expect.

3. Credit History

Generally speaking, having a solid business credit history is advantageous when applying for loans. That being said, your credit report is only one factor among many — it's not the sole decider for securing funding from business lenders.

4. Length of Time in Business

The longer your company has been around, the better. Lenders prefer businesses that have been operating for a minimum of six months. Exceeding that number increases your approval odds and the chance of securing competitive rates.

5. Profitability

Lenders want your financials to show your business's ability to consistently turn a profit. You'll want to be able to show a positive trend with money movement in and out of your business. Being able to do so will put you in a good spot as an applicant.

6. Bank Statements

Plan to have the last three months of bank statements readily available. Your adviser will review the documentation to validate operating cash flow. Having healthy finances will work in your favor.

How Alternative Lenders Approach High-Risk Business Loans

When traditional banks decline an application, it's often because their lending models leave little room for flexibility. Alternative lenders take a different approach to risk, which makes high-risk business loans possible in the first place.

Instead of relying almost entirely on credit scores, alternative lenders may mitigate risk by:

• Adjusting interest rates. Higher perceived risk can result in higher rates compared to traditional bank loans.

• Using shorter repayment terms. Shorter terms reduce lender exposure while helping borrowers access capital faster.

• Relying on collateral or revenue-based repayment. Equipment, invoices, or future sales may secure the financing instead of personal assets.

• Focusing on cash flow over credit history. Consistent revenue and recent bank activity often matter more than past credit challenges.

These trade-offs are what allow alternative lenders to fund businesses with bad credit, limited operating history, or industry-specific risk factors. For many business owners, access to capital now outweighs waiting months for a bank approval that may never come.

Clarify Capital adds value by shopping your application across a network of 75+ lenders to identify the most competitive options available for your specific situation — even in high-risk scenarios. Rather than accepting the first offer you receive, Clarify helps you compare options and understand the true cost of each loan.

High-Risk Industries Clarify Capital Helps Fund

Many banks avoid lending to certain industries due to revenue volatility, regulatory complexity, or higher default rates. Clarify Capital works with alternative lenders who understand these challenges and evaluate businesses based on real performance, not just industry labels.

Clarify Capital has helped secure funding for businesses in industries commonly considered high risk, including:

• Trucking and transportation companies. Owner-operators and fleet businesses with high fuel costs, equipment expenses, or bad credit histories often struggle to qualify for bank loans.

• Restaurants and food service businesses. Independent restaurants, food trucks, and hospitality businesses facing thin margins, seasonal demand, or prior closures.

• Construction and contracting companies. General contractors and specialty trades dealing with project-based revenue, delayed payments, or heavy equipment expenses.

• Cannabis-related businesses. Dispensaries and ancillary cannabis businesses operating in a highly regulated environment where many traditional lenders will not participate.

• Retail and e-commerce businesses. Online sellers and brick-and-mortar retailers managing inventory costs, chargebacks, or fluctuating sales volume.

• Seasonal and service-based businesses. Landscaping, tourism, and other seasonal operations that experience uneven cash flow throughout the year.

These industries are often labeled high risk by banks, but they still need reliable access to capital to grow, manage expenses, and stay competitive.

By working with a broad lending network, Clarify Capital helps businesses in these industries access financing even when traditional lenders decline their applications — including options for owners with bad credit or limited operating history.

Popular High-Risk Loan Uses

Whatever your business needs, we're here to help. Below are the most common ways high-risk borrowers use their loans.

Immediate Needs

Fast funding options provide an infusion of working capital in your bank account, so you can address your most pressing needs. Our process is streamlined and quick, so you get financing without delay.

Slow Periods

If you're experiencing a dip in sales, meeting your immediate financial obligations might be difficult. We offer high-risk financing options to help bridge short-term cash flow gaps.

Inventory and Supplies

Get the materials you need for your business when you need them. Funds can be allocated toward purchase orders to get both inventory and supplies.

Machinery and Equipment

If you need special equipment or machinery for your business operations, we've got you covered. We offer competitive equipment financing with high approval rates.

Rent and Utilities

Free up cash flow to pay for operational expenses, like rent and utilities, by financing. That way, your day-to-day expenses get paid on time and in full.

Refinancing

Restructure your debt, such as credit card debt, based on terms that work for you. We offer low interest rates and flexible loan terms, so you can choose a loan that makes sense for your unique situation.

Access High-Risk Business Loan With Clarify Capital

Being labeled “high risk” doesn't mean your business lacks opportunity or growth potential. It simply means traditional lenders may not be equipped to evaluate your situation fairly. Alternative financing options exist to help businesses with unique challenges access the capital they need to operate, stabilize cash flow, or pursue growth.

Clarify Capital helps bridge that gap by connecting businesses with a broad network of alternative lenders and comparing options to find financing that aligns with real-world business needs. With flexible eligibility criteria, multiple loan structures, and adviser support throughout the process, Clarify makes high-risk business funding more approachable and transparent.

If you're exploring high-risk business loan options, complete a short online application to see what financing solutions may be available for your business through Clarify Capital.

FAQs About High-Risk Loans

We address some of the most frequently asked questions about high-risk loans to help you understand how they work and who qualifies.