Perhaps your credit is less than stellar or you want to avoid further dings to your credit report. Can you secure funding for your company?  

Yes. Bad credit business loans exist to help small business owners with their financing needs. Learn more about your options for business funding with bad credit.

Bad Credit? Business Loans Are Available

According to the Small Business Administration (SBA), 21.9% of owners rely on personal and family savings. But unexpected emergencies throw a wrench into company finances. If you can’t access conventional lending options or use a business credit card, then see if a bad credit business loan is right for you. 

Obtaining business funding with bad credit is possible.  A few choices are available. For example, if your company is set up as a corporation, then it’s possible to get a small business loan with no personal credit check. However, securing business funding with bad credit may result in a “soft pull” inquiry on your credit account. 

What’s a Soft Pull?

A soft inquiry looks at your payment history, collection accounts and lines of credit. It gives a broad overview of your credit information.

A soft pull doesn’t affect your credit score and is used during the prequalification stage. 

After qualifying for funding, many lenders require a “hard pull” inquiry, which will affect your credit score. It’s essential to select companies that only do this as the final step. 

With that mind, you might consider securing a loan from a lender that can connect to your accounting program or bank account. These companies may not require a credit check. Instead, the lender reviews your business revenue data. 

Types of small business loans with no credit check include:

    • Invoice financing and factoring loans
    • Merchant cash advance (MCA) funding
    • Equipment financing loans
    • Term loans
    • Short-term loans and lines of credit

Securing business funding with bad credit may result in a "soft pull" inquiry on your credit account. 

Business Funding With No Credit Check

Depending on your needs, credit score and business performance, you may qualify for a variety of business loans. Options include revenue-based financing and unsecured lines of credit

Let’s break down the funding options:

Invoice Financing and Factoring 

If you’re waiting on payments from clients, but falling short on payroll, then invoice financing or factoring loans may help you. Accounts receivable (AR) financing lenders place less importance on your credit score. Instead, they loan you money based on your unpaid invoices. You borrow money against your invoice, so your invoices serve as a form of collateral. Invoice financing and factoring help businesses solve their cash-flow problems

The main difference between financing and factoring is that with invoice financing, you collect the invoice payments and pay your debt to the lender. With invoice factoring, the lender collects from your clients and remits any extra payments to you.


This lender provides invoice factoring loans. The company also offers qualified applicants term loans and lines of credit. BlueVine will pull a soft credit inquiry before giving you the loan. Then, the lender collects money from your clients. Once BlueVine’s debt is paid back, then they disperse the remaining funds to you. 

  • Need a minimum 530 credit score
  • Require $10,000 a month in invoicing
  • No doc business loans are available by connecting your bank account to your BlueVine account

Merchant Cash Advances

Although the fees are higher with MCA funding, the lender uses your daily transactions as a form of collateral. You’ll pay a percentage of your accounts receivables to the lender. 

First American Merchant

This lender provides a small business loan no personal credit check. Instead, the company looks at your business performance. You won’t have monthly payments as the company takes a percentage of your credit-card transactions as payment.

  • Helps owners with credit scores of less than 500 
  • Provides no document business loans with no financials or tax returns required
  • Also offers an automated clearing house (ACH) program that considers your total gross deposits in your bank account

PayPal Working Capital Loans

If you do business through PayPal, then this type of financing is an excellent way to secure a small business loan with no credit check. You can finance up to 35% of your annual PayPal sales. Instead of reviewing your credit report, the lender reviews your revenue paid through PayPal. 

  • The loan is paid automatically as a percentage of your sales
  • A minimum payment of 5%-10% is required every 90 days
  • Financing through PayPal comes with only one fixed fee and no other charges
  • There is no early repayment fee

American Express Merchant Financing

American Express works with companies that accept American Express as a payment method. Your payment includes fixed costs that vary according to your loan length and other business performance factors. This lender bases your loan on your business assets, excluding property and vehicles. 

  • Repay your loan automatically through your card receivables or debit ACH 
  • Funding amounts start at $5,000
  • You’ll have set payback terms of 6, 12 or 24 months

Equipment Financing

An equipment financing loan works well for business owners with bad credit because the equipment is the collateral. If you don’t pay on time, then the lender repossesses the equipment. However, some equipment financing loans require a down payment. 

If you need new equipment, then talk to the retailer first. Many offer financing and lease options. If you are purchasing equipment from someone who doesn’t offer business loans, then consider other options such as a short- or long-term loan. 

Although the fees are higher with merchant cash advances, the lender uses your daily credit-card transactions as a form of collateral.

Term Loans

Term loans, also called installment loans, are similar to a conventional bank loan. You pay a set amount with regularly scheduled payments. A conventional loan is harder to get if your business credit isn’t great. For bad credit business loans, consider speaking with a lender that helps owners with poor credit. 

American Express

For companies with a preapproval offer from American Express, applying for a term loan won’t affect your credit score. This allows you to secure business funding with no credit check.

  • Pay monthly for 6, 12, 24 or 36 months
  • Loan amounts start at $3,500 


Based on a company’s performance, Kabbage offers small business loans with no credit check. This no-document business loan requires a link to your accounting data online or through its mobile app. 

  • No origination fees or prepayment penalties 
  • Choose 6-, 12- or 18-month loan terms

Short-Term Loans and Lines of Credit

Short-term loans help you finance your business, and you have 1 to 3 years to pay it back. Many short-term loans use a factor rate instead of an interest rate. Factor rates differ from interest rates because factor rates are calculated once based on the initial loan amount. With APR financing, the interest is recalculated as the balance changes. So, you won’t save money on interest by paying off a factor loan early. While some companies do check your credit score, others focus on your business’s performance. 

American Express Working Capital Loans

This type of loan sends payment to your vendors and frees up your day-to-day finances. However, working capital loans are only available to existing American Express business card customers. 

  • No impact on your credit score 
  • 30-, 60- or 90-day payment terms


This lender provides two types of loans: a revolving line of credit and net terms on business purchases. Fundbox’s approval process requires you to provide access to either your business checking account, bank statements, credit report or accounting software. 

  • No fee for paying early
  • Gives you a dashboard for making payments and seeing loan details

Business Finance: No Credit Check Required

If you’re unsure about applying to a single vendor or have unique problems, then consider going through a lending platform. An online lending platform gives you access to many lenders in one spot. Doing so helps you avoid negative credit marks from multiple hard pulls on your account. Instead, a lending platform often does a soft pull then finds lending partners that fit your needs. This type of platform works well for those who want small business loans with no credit check or business funding with bad credit. 

Get Business Funding with Bad Credit 

Before choosing one lender, take the time to review all of your loan costs. Different lenders charge fees such as origination fees and penalties for early repayment. Plus, your interest rate may vary widely depending on the type of loan, your industry and revenue reports. Bad credit business loans exist to help small companies stay in business. By choosing the best company and loan type for your needs, you’ll avoid extra expenses and be able to pay your vendors (and employees) on time.

Get weekly business insights & expert advice to help grow your business.