Starting a Business With Bad Credit

It can be shocking to many that of all the businesses applying to banks for a loan only 27% will receive loan approval. Even those businesses with amazing credit rating find it hard to finance a loan, let alone those businesses or people looking a start a business with a poor credit rating.

How You Can Get The Money You Need for Your Small Business

It can be difficult to start a business when your personal credit history is bad. Do not feel discouraged, it can be done! While capital is what is causing your business to lack, preventing it from getting off the ground. So what can you do if your credit is preventing you from getting a business loan?

There are alternative funding programs and solutions providing business owners the opportunity to obtain a business loan or line of credit regardless of having bad personal credit. Instead this alternative lending source takes bank deposit history, credit card sales, credit partners and other data sources into consideration for business loan approval. And Here is how they help your business to get the financing it needs:

Bank Deposits

A revenue-based loan is approved based on your businesses regular bank deposits, putting your cash flow to work. This program bases approval off the deposits going into the business bank account on a monthly basis. Your business could get a loan equal to 10% of its annual gross deposits, regardless to having bad business or personal credit. Typically the revenue-based loan program will take as little as 7 days to get the funds after approval.

The revenue-based loan program often has a loan term of 10 months, with rates higher than a traditional bank rate. There are no collateral requirements, financials or tax returns required to secure the loan. The repayment portion of a revenue-based loan requires the business to make small payments every day via ACH from their business bank account.

Credit Card Sales

The merchant cash advance program is a funding program that provides business with upfront cash in exchange of a portion of future credit card sales. If your business has regular monthly credit card sales, but have bad credit, then a merchant cash advance may be the best option.

Be aware of the merchant cash advance provider you choose, they all have their own interest rates associated with the program, some much higher than others. There are some providers that charge upwards of 38%, however there are also those that charge as low as 12% interest on cash advances. This program allows a fixed monthly installment payment as its repayment method, making it an affordable option for most businesses.

Credit Partner

If your business is faced with struggles due to bad credit but has taken on a business partner as a credit partner you may be able to obtain lines of credit through business credit cards. With a business partner with a strong credit history, you may be able to get the funds you need to move forward in your business rather than being stuck by bad credit. If you do not have a partner currently, this may be the best idea to start with for your business.


These are just a few options you have for getting financing for your small business. However there are also many other funding programs that can help get you the money you need for your small business without having amazing credit or going through a rigorous analysis, mountains of paperwork and a long and stressful lending process as there is with a traditional bank loan.


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