A low credit score doesn't mean no funding.
Banks decline most business owners under a 650 FICO — but banks aren't the only lenders. Equipment financing, invoice factoring, revenue-based financing, and CDFI microloans all underwrite your assets, revenue, or plan far more than your score. This page shows the options that actually fund borrowers in the 500–650 range, the honest cost of each, the predatory offers to avoid, and how to move up to cheaper money.
See what I qualify for →Quick answer
With bad credit, stop applying for the bank loan you can't get and match the product to what you DO have. Buying an asset? Equipment financing (~580, the asset is collateral). Invoicing other businesses? Factoring (no FICO minimum — your customer's credit qualifies you). Strong deposits, weak score? Revenue-based financing. Startup or mission-eligible? An SBA microloan through a CDFI is the cheapest small-dollar money. A merchant cash advance is the easiest to get and the most expensive — a genuine last resort, not a first call.
At a glance: financing that works with bad credit
| Option | Typical min. credit | Typical cost | Speed | |
|---|---|---|---|---|
| Equipment financing | 580+ FICO | 6–16% APR | 3–7 days | Details → |
| Invoice / AR factoring | No FICO minimum | 1–4% per invoice | 5–10 days to set up, ~24h per invoice after | Details → |
| Revenue-based financing | 550+ FICO (revenue-weighted) | 1.1–1.5× factor (read the effective APR) | 1–3 days | Details → |
| SBA microloans & CDFI lenders | Flexible / mission-based | 8–13% APR | 30–90 days | Details → |
| Secured line of credit & business credit cards | Rebuilds from 500s | Deposit-backed; interest only if you carry a balance | Same week | Details → |
| Merchant cash advance (last resort) | 500+ FICO | 1.2–1.5× factor = ~40–150% effective APR | Same day–48h | Details → |
Ranges are typical 2026 market conditions based on SBA.gov program rules and published lender and industry data. Actual rates, amounts, and approval depend on the lender, your revenue, collateral, and full credit profile — these are typical ranges, not offers or guarantees of approval. Business Cash Guide is a loan-matching service, not a lender.
Each option in depth
Ordered cheapest-and-most-accessible first. Work down the list — reach for a merchant cash advance only after you've ruled out everything above it.
Equipment financing
The equipment you're buying is the collateral, so the lender's risk is in the asset — not your score. This is the single most accessible way to borrow with weaker personal credit.
Best when
You're buying a truck, machine, kitchen, or any hard asset. Subprime equipment lenders approve down to ~550 with 20–35% down.
Typical terms
Credit: 580+ FICO
Cost: 6–16% APR
Speed: 3–7 days
Invoice / AR factoring
You sell unpaid B2B invoices to a factor for an advance (usually 80–90%) and get the rest, minus a fee, when your customer pays. Approval is based on YOUR CUSTOMER's credit — not yours.
Best when
You invoice other businesses (or government) on net-30/60/90 terms. A 550 FICO owner with strong customers qualifies.
Typical terms
Credit: No FICO minimum
Cost: 1–4% per invoice
Speed: 5–10 days to set up, ~24h per invoice after
Revenue-based financing
You repay a fixed multiple of the amount borrowed as a percentage of daily or weekly sales. Lenders underwrite your revenue and bank-statement history far more than your credit score.
Best when
You have steady deposits ($10K+/mo) but a low score, and need speed. Better structured than a raw MCA.
Typical terms
Credit: 550+ FICO (revenue-weighted)
Cost: 1.1–1.5× factor (read the effective APR)
Speed: 1–3 days
SBA microloans & CDFI lenders
SBA microloans (up to $50K) are delivered through nonprofit CDFIs and intermediaries (Accion, LiftFund, Justine PETERSEN) whose mandate is to fund businesses banks turn down. They weigh your plan and character, not just FICO.
Best when
You're a startup, low-credit, minority-, women-, or veteran-owned business willing to trade speed for the cheapest small-dollar money available.
Typical terms
Credit: Flexible / mission-based
Cost: 8–13% APR
Speed: 30–90 days
Secured line of credit & business credit cards
A secured card or credit-builder line is backed by a cash deposit, so approval is near-automatic. Used responsibly, it builds the business credit file that unlocks cheaper money in 6–12 months.
Best when
Your score is too low for anything unsecured and you want to fix that while covering small, recurring costs.
Typical terms
Credit: Rebuilds from 500s
Cost: Deposit-backed; interest only if you carry a balance
Speed: Same week
Merchant cash advance (last resort)
A lump sum repaid via a fixed daily/weekly holdback on your card sales. The easiest money to get with bad credit — and by a wide margin the most expensive. Include it here so you can recognize and price it, not so you reach for it first.
Best when
Only a genuine, short, revenue-generating emergency with a clear payoff inside 90 days — after you've ruled out every option above.
Typical terms
Credit: 500+ FICO
Cost: 1.2–1.5× factor = ~40–150% effective APR
Speed: Same day–48h
Already been turned down?
"My bank declined me."
A bank 'no' is a product mismatch, not a verdict. Alternative and online lenders underwrite differently — revenue and collateral over FICO. See our full guide to small business loan alternatives when the bank says no.
"My SBA loan was denied."
SBA denials are often fixable — wrong lender, thin file, or a specific eligibility gap. Here's exactly what to do after an SBA loan denial, including which lenders to try next.
"I need cash this week."
Real, fast, bad-credit-friendly paths exist — but speed is expensive. Compare your emergency business loan options for 2026 before you sign anything same-day.
"I'm already stuck in MCA debt."
Stacked advances are survivable with a plan. Read how MCA stacking traps businesses — and how to escape it before taking on anything new.
Bad-credit borrowers are targeted — protect yourself
- "Guaranteed approval" is a red flag. No legitimate lender guarantees a loan before reviewing your file. It's marketing for a high-cost product or a scam.
- Never pay an upfront fee to "release" funds. Advance-fee loan fraud specifically targets business owners with poor credit. Real lenders deduct fees from the funded amount — they don't ask you to wire money first.
- If the cost is a "factor rate," treat it as an MCA. Convert it to an effective APR before comparing. A 1.4 factor over 6 months is roughly 80–120% APR — not the "1.4%" it can be made to sound like.
- Don't stack. Taking a second or third advance to make payments on the first is the fastest path to insolvency. If you're being offered a stack, that's the signal to stop and restructure.
Keep reading
Best Business Loans for Bad Credit 2026
The full deep-dive: lender categories, real qualifying thresholds, and how to shop without wrecking your score.
Read the guide →How to Build Business Credit
The step-by-step that moves you from MCA-only territory to real term loans and lines of credit in 6–12 months.
Build your credit →Funding Quiz
Six questions and a recommendation for the product you're most likely to qualify for — based on your revenue, credit, and time in business.
Take the quiz →Improve Your Loan Approval Odds
What underwriters actually look at, and the fixes that raise your approval chances before you apply.
Improve your odds →See what you qualify for — even with bad credit
One short form. We compare your business across 50+ lenders — including the equipment, factoring, and revenue-based lenders that fund lower-credit borrowers — and bring back the options most likely to approve you. Free to you, and checking is a soft pull with no credit impact.
Get matched