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Bad Credit, but Still Need a Business Loan?

I do not know about you, but 2021 has already turned out to be a better year than 2020. But has it gotten easier to get a business loan with bad credit?

Having bad credit and getting a business loan with terms that are not astronomical has been a little hard in the past. Being grouped with the bad credit bunch might make you think it is virtually impossible to get a good business loan without trading in both kidneys. But, letting you in on a little secret, that is not always true.

Poor credit might make it harder for you to get the lowest cost loans; bank loans and SBA (Small Business Administration) loans, but there are over 40 different financing options for small business owners and good for you, not all of them require perfect business or personal credit (you still might need to pay a premium when approved). So, in a nutshell, there are financing options, but they might come with higher interest rates.

The Trade-Off

If you are a business owner and have bad personal credit, there is a trade-off, you may get financing, but you are more likely to have to pay a higher APR (Annual Percentage Rate) due to the extra risk the lender assumes due to your less than perfect credit score.

What is Bad Credit?

What exactly are lenders looking at when they consider good or bad credit? Let us break it down:

800-850 (Exceptional)

740-799 (Very Good)

670-739 (Good)

580-669 (Fair)

500-579 (Poor)

Below 500 (Very Poor)

What is the Best Loan for Bad Credit?

So even with bad credit, you can still find yourself a good business loan (with keeping the tradeoff in mind). Several online lenders offer credit to businesses with an overall bad credit score if you can prove you make enough money to make the payments.