How to Get a Business Loan with Bad Credit in 2025

Introduction

How to Get a Business Loan? Many small business owners face challenges when applying for loans due to a poor credit score. However, in 2025, lenders are offering more flexible options to support entrepreneurs. Even with bad credit, you can still secure funding for your business if you know where to look and how to prepare.

This guide will walk you through the best strategies, loan types, and tips for getting a business loan with bad credit.

What Does Bad Credit Mean for Business Loans?

• Credit Score Range: Generally, a FICO score below 580–600 is considered bad credit.

• Impact: Lenders see you as high-risk, which means higher interest rates or stricter requirements.

• But Good News: Many lenders now focus on your business performance, revenue, and cash flow instead of only personal credit scores.

Types of Business Loans Available with Bad Credit

1. Microloans

• Offered by nonprofit organizations and government-backed institutions.

• Loan amounts: $500 – $50,000.

• Easier approval with flexible terms.

2. Merchant Cash Advances (MCA)

• Based on your daily credit/debit card sales.

• Quick approval but comes with higher fees.

3. Invoice Financing

• If you have unpaid invoices, lenders provide an advance against them.

• Good for businesses waiting on client payments.

4. Secured Business Loans

• Backed by collateral such as property, inventory, or equipment.

• Higher approval chances despite bad credit.

5. Online Lenders (FinTech)

• Many online lenders in 2025 offer loans based on cash flow, sales, and revenue, not just credit scores.

• Faster processing than banks.

How to Improve Your Chances of Approval

✅ Prepare a Strong Business Plan – Show lenders how your business will grow and generate revenue.
✅ Show Proof of Cash Flow – Bank statements, invoices, and revenue records help lenders trust your ability to repay.
✅ Consider a Co-Signer or Partner – Someone with good credit can boost your loan approval chances.
✅ Offer Collateral – Assets like real estate, vehicles, or equipment reduce lender risk.
✅ Apply for Smaller Loans First – Build repayment history to qualify for bigger loans later.

Best Lenders for Bad Credit Business Loans in 2025

• Kiva (peer-to-peer microloans, interest-free up to $15,000).

• OnDeck (bad credit business loans, requires $100k+ annual revenue).

• Fundbox (short-term credit lines for businesses).

• BlueVine (invoice factoring and lines of credit).

• Accion Opportunity Fund (nonprofit microlender with flexible terms).

Pros & Cons of Bad Credit Business Loans

✅ Pros:

• Accessible funding even with low credit.

• Helps build business credit history.

• Quick approval compared to traditional banks.

❌ Cons:

• Higher interest rates.

• Shorter repayment terms.

• May require personal guarantees or collateral.

Expert Tips for How to Get a Business Loan 2025

🔹 Focus on cash flow lenders instead of traditional banks.
🔹 Use business credit cards responsibly to slowly improve credit.
🔹 Avoid predatory lenders offering extremely high APR loans.
🔹 Always compare multiple lenders before applying.

Conclusion

Bad credit does not mean the end of your entrepreneurial dreams. In 2025, you still have access to microloans, online lenders, secured loans, and invoice financing. By preparing a solid business plan, proving steady cash flow, and considering alternative funding, you can successfully secure the loan your business needs.