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Can you get a business loan with bad credit?
Yes. Online and alternative lenders often weigh your business revenue, bank activity and time in business more heavily than your credit score. Strong, consistent sales can offset a low score — though you should expect higher rates.
Bad-credit business financing options
- Online term loans: faster approval with flexible credit requirements.
- Business lines of credit: draw funds as needed, repay and reuse.
- Merchant cash advances: repaid from daily sales (convenient but costly).
- Equipment financing: the equipment secures the loan, easing credit requirements.
- Invoice financing: borrow against unpaid invoices.
- Secured loans: collateral lowers the lender’s risk and your rate.
What it will cost
Bad-credit business loans carry higher APRs and sometimes fees to offset risk. Always compare the total cost of borrowing — not just the rate — and confirm the repayment schedule fits your cash flow.
How to improve your approval odds
- Show strong, steady revenue with recent bank statements.
- Offer collateral or a personal guarantee.
- Apply for a smaller amount to start.
- Reduce existing business debt before applying.
- Keep clean, up-to-date bookkeeping.
Build business credit for the future
Every on-time payment helps. Open a business bank account, use a business credit card responsibly, pay suppliers on time, and work with lenders that report to business credit bureaus. Over time this opens the door to lower-cost financing.
Avoid predatory offers
Steer clear of lenders who guarantee approval, demand large upfront fees, or hide the true cost. Reputable lenders disclose the APR and total repayment before you commit.
Frequently asked questions
What credit score is too low? There’s no universal cutoff — revenue-based lenders may approve scores well under 600.
Will a loan improve my credit? Yes, if the lender reports payments and you pay on time.
Is a merchant cash advance a good idea? It’s fast but expensive — use it only when the math clearly works for your margins.
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Disclaimer: LoanWave.ca is an affiliate / comparison website. We are not a lender and do not provide loans. We may earn a commission from partners. Rates and terms are set by lenders. Informational content only, not financial advice.