Traditional banks reject over 80% of small business loan applications — and that number is even higher for businesses with credit challenges. But the alternative lending market has created viable options for nearly every business profile. Here are the five best options, ranked by accessibility.
Merchant Cash Advance
MCAs are the most accessible funding option for businesses with bad credit because approval is based primarily on your monthly revenue — not your credit score. If your business processes $10,000+ per month, you have a strong chance of approval even with a 500 credit score.
Business Line of Credit (Alt. Lender)
Alternative lenders like Bluevine and Fundbox offer lines of credit to businesses with credit scores as low as 550. The key requirement is consistent monthly revenue — typically $10,000+ per month for at least 6 months.
Invoice Factoring
Invoice factoring doesn't check your credit at all — it's based on your clients' creditworthiness. If you're a B2B business with outstanding invoices from creditworthy clients, you can access immediate cash regardless of your personal or business credit score.
Equipment Financing
Because the equipment itself serves as collateral, lenders are more willing to work with lower credit scores. If you need to purchase equipment to grow your business, this is often the most affordable option for credit-challenged borrowers.
Microloans (SBA Microloan Program)
SBA Microloans are designed for underserved businesses, including those with imperfect credit. They're administered through nonprofit intermediaries who provide both funding and business development support. Rates are much lower than alternative lenders.
What Can You Get at Each Credit Score Level?
Very limited. Focus on invoice factoring or revenue-based financing. Work with a broker to find specialty lenders.
Merchant cash advances, invoice factoring, some equipment financing. Expect higher factor rates.
MCAs, alt. lines of credit, equipment financing, some term loans. More options open up.
Most alternative lending products. SBA Microloan possible. Rates start to improve.
Full alternative lending market. SBA loans possible. Consider refinancing existing high-cost debt.
Full access to all products including SBA 7(a) and bank term loans at competitive rates.
How to Improve Your Business Credit Score
While you access funding now, work simultaneously to improve your credit profile. This will unlock better rates and larger amounts in the future.
Open a Business Credit Card
Use it for regular expenses and pay in full monthly. This builds your business credit profile with Dun & Bradstreet and Experian Business.
Pay All Obligations On Time
Payment history is the single largest factor in credit scoring. Even one late payment can set you back 3–6 months of progress.
Get a D-U-N-S Number
Register your business with Dun & Bradstreet for free. This is the foundation of your business credit profile.
Dispute Inaccuracies
Review your personal and business credit reports. Errors are common and can be disputed for free through the credit bureaus.
Reduce Credit Utilization
Keep your business credit card utilization below 30%. High utilization is a major negative factor in scoring models.
Work With Vendors Who Report
Some suppliers report payment history to business credit bureaus. Paying these accounts on time builds your profile quickly.
Bad Credit Doesn't Mean No Options
Our brokers specialize in matching credit-challenged businesses with the right lenders. We'll find the best available terms for your situation — at no cost to you.
Related Guides
What Is a Merchant Cash Advance?
The most accessible funding option for bad credit businesses.
How to Get Business Funding Fast
Secure capital in 24–72 hours with these strategies.
All Business Loan Options Explained
Complete comparison of every major funding product.
Equipment Financing Guide
Finance equipment even with imperfect credit.