Guide to Bad Credit Business Loans

female orchard business owner picking apples, guide to bad credit business loans

Estimated reading time: 3 minutes

Cash flow in any business is a big deal, but your working capital gives you the financial capability to handle one-off emergencies. When a piece of equipment breaks, when there’s a sudden shortage in supplies, or when you take on a new business endeavor, you need access to money that won’t affect your bottom line. This is why owners of many small businesses apply for working capital loans.

But how do you get a loan for your business when you have bad credit?

When your credit score falls under the “fair” to “poor” credit rating system, lenders will classify you as a risky client and reject your loan applications. But this doesn’t mean you are out of options. There are other types of business loans available to you, regardless of your credit score.

Working capital loans for businesses with bad credit.

There are lending options that don’t require a high credit score. Some lenders are more understanding of the causes of bad ratings, especially in business.

Line of credit

This is considered one of the most popular working capital loans. When you apply for a business line of credit, the lender will define the amount you can access. You will be given a repayment plan that indicates when to make payments and how much interest will be charged down the line.


Also known as factoring receivables, this type of loan uses your unpaid customer invoices as collateral. Although you retain legal ownership over the outstanding invoices, failure to keep up with repayments gives the lender the right to take over.


Micro-lending is a type of peer-to-peer financing model where you approach individuals instead of financial institutions for loans. More businesses are applying for this type of loan, but it presents several risks to borrowers, including higher interest rates and longer application periods.

Online business loans

The digital landscape has created a new environment where individual lenders are more accessible. Most online lenders will look at your business performance rather than your credit score, making it easier to apply for a loan.

Merchant cash advance

This isn’t a loan in the technical sense, but it acts similarly to one. In this financing model, the lender looks at daily credit card receipts to determine if a business can pay back funds in a timely manner. Basically, a small business “sells” a portion of future credit card sales to acquire capital immediately. Most cash advances require daily or weekly repayments.

Probably Funding: Your financing partner in business.

Business loans for bad credit exist, but you have to find the right lender to apply for one. Probably Funding understands the struggles small businesses face when applying for loans and we believe every business deserves access to capital.

We have a three-step process for our business loans:

  1. First, you need to fill out our online application form.
  2. We will then contact you to discuss your business, its needs, and the appropriate financial plan for it.
  3. Once we’ve approved your application, you can get your funding as soon as possible.


This Probably Funding blog post is purely educational and features general information and opinions. Nothing contained herein is intended to constitute advice or recommendations and should not be treated as such.