A quick business funding process that offers bad credit business loans for business owners.
Last Updated on June 13, 2025
Shield Funding TeamA bad credit score can make borrowing difficult for any business owner. Even if your company has strong financials, and has been in business for more than 2 years, a bad personal credit score makes getting approved for a business loan with a bank very unlikely.
In fact, borrowing has become more difficult because of the high interest rate environment today and the decreasing quality of credit in applicants. Lending guidelines continue to get stricter and it all the factors point to this trend continuing.
Shield Funding understands this lending environment better than most lenders after navigating almost every situation over the last two decades. This is why we continue to offer funding programs despite the tightness of the current lending environment. If you are an existing business owner with an average monthly revenue above 10K for the last few months, below are some of the best business funding options for bad credit applicants.
What Do I Need to Qualify?
Below is a list of the general requirements to get approved for business funding with our basic program.
How Do I Apply?
Applying has never been easier. You can either call our toll free number 24 hours 7 days a week at:
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A merchant cash advance is an alternative loan option if you own an existing business that has monthly revenue of 10K or more for several consecutive months. It differs compared to bank business loans because you are not actually taking a loan, you are taking a contract to sell a small percentage of future business sales in advance of that revenue. Rates on the funding comes as a factor rate which is a flat fixed fee, which generally ranges from 1.2 to 1.5 (20%-50%+).
This business loan solution is mostly reserved for business owners that cannot receive financing from banks and other traditional lending options. It can be a useful tool for short term emergency expenses as it can be funded the same day you apply. A merchant cash advance is a high interest rate sub-prime lending option and is one of the most expensive forms of business financing. It should be a last resort after all other funding channels have been exhausted.
A short term business loan, which may come packaged as working capital or business credit in some form, is a type of financing that is typically used to address immediate, temporary financial needs within a business. Unlike long term business loans, which are structured to be paid back over 5 years or more, short term business loans are designed to be repaid within a relatively brief period, usually within 1-2 years. Rates and terms on short term funding vary but interest generally ranges from 20%-60%. These loans are often used to manage cash flow fluctuations, handle emergency expenses expenses, or capitalize on sudden business opportunities.
Working capital loans is another type of short term financing that offers working capital for bad credit. This type of funding is not for long term asset financing but best suited for short term operating expenses such as rent, payroll, and other every day business expenses. Depending on the lender, this option also has a quick turnaround with minimal paperwork. Many non-bank lenders found online offer immediate working capital packaged as different short term loan types with interest rates of 30-50% or more, with daily or weekly payments depending on the lender and the borrower’s payment history.
Invoice factoring can be a great business loan alternative for business owners with bad credit. With factoring, the business sells its outstanding invoices to a lender at a discount, and the credit of the invoiced customers is actually more important than the borrowing business. This arrangement allows businesses to receive immediate cash, which can be crucial for managing cash flow, rather than waiting for their customers to pay their invoices. The factoring company pays the business a significant percentage of the invoice’s value upfront, usually around 70% to 90%, and then they take the steps necessary to collect the invoice balances.
It is important to consider the potential impact on customer relationships, as the factoring company becomes responsible for collecting payments directly from the business’s customers. As long as the interaction with clients is acceptable, invoice factoring can be a great bad credit business loan.
Equipment financing can be an great business loan alternative for business owners with poor credit history. This type of financing specifically targets the purchase or leasing of equipment necessary for the business’s operations. Many lenders will offer this type of business financing for bad credit borrower’s because it is less risky. Rates on this type of borrowing range from 10%-40% for a term of 3 to 10 years.
Credit unions often provide more personalized service and may have more flexible lending criteria compared to traditional banks. For instance, Navy Federal Credit Union offers a suite of small business financing solutions, including loans and lines of credit, which can be beneficial for businesses looking to improve cash flow or invest in equipment.
Organizations like Self-Help Federal Credit Union specialize in providing financial services to underserved communities. They offer small business loans starting from $15,000, focusing on supporting entrepreneurs who might not qualify for traditional financing
Citadel Credit Union, an SBA-approved lender, assists businesses in securing SBA-guaranteed loans, including the SBA 7(a) and SBA Express programs. These loans are backed by the U.S. Small Business Administration and can be a viable option for businesses with less-than-perfect credit seeking to grow or stabilize their operations.
Civic Federal Credit Union offers unsecured business lines of credit starting at $1,000, with a maximum of $30,000. This revolving credit option provides consistent access to funding, which can be beneficial for businesses needing flexibility in managing cash flow.
HOPE Credit Union provides various business lending options, including start-up loans and specialized programs for Black- and women-owned businesses. They focus on supporting underserved communities, making them a valuable resource for entrepreneurs facing credit challenges.
Bad credit business loans are an ideal solution for entrepreneurs who need working capital but don’t qualify for traditional bank financing due to credit challenges. These loans are specifically designed for business owners who may have a credit score below 650, a history of missed payments, or limited credit history—but still have a strong and consistent revenue stream. Whether you need funds to cover payroll, manage inventory, pay rent, handle emergency repairs, or invest in marketing and growth, there are no restrictions on how the capital is used. Loan amounts typically range from $5,000 to $500,000, and in many cases, you can receive approval and funding in as little as 24 hours.
These loans are generally unsecured, meaning no collateral is required, and approval is based largely on your business performance rather than your credit score. If you’ve been denied a traditional loan, options like revenue-based financing or a merchant cash advance may offer an excellent alternative—especially for businesses with consistent monthly sales. Even if you don’t process credit cards, we offer other forms of bad credit business loans that rely on your bank deposits or cash flow to determine eligibility. Our goal is to provide access to fast, reliable funding—even for those who’ve been overlooked by conventional lenders. No matter your credit situation, we work with you to create a financing solution that supports your goals and keeps your business moving forward.
Bad credit business loans offer fast, flexible funding for business owners who may not qualify for traditional financing but still need capital to grow or stabilize their operations. These loans are especially useful for purchasing inventory ahead of seasonal spikes, allowing you to stock up and take advantage of supplier discounts—even with less-than-perfect credit. You can also use the funds to hire or retain staff, ensuring your team is equipped to handle increased demand or new business opportunities.
Beyond daily operations, bad credit business loans are a powerful tool for launching marketing campaigns, updating equipment, or covering emergency expenses without delay. Whether you’re dealing with cash flow challenges or aiming to expand into a new market, the ability to secure same-day funding—even with a low credit score—means you can act quickly and confidently. These loans don’t require collateral, and approval is often based on your business’s revenue, not your credit history. No matter your situation, bad credit business loans give you the flexibility and speed to keep your business running strong.
Before taking out a bad credit business loan, it’s crucial to evaluate your financial situation to ensure it’s the right fit for your business. Start by reviewing your monthly revenue, fixed expenses, and overall cash flow to determine how much you can realistically afford to repay. Since bad credit loans often carry higher interest rates or shorter repayment terms due to the increased risk to lenders, you’ll want to fully understand the total cost of borrowing—including any fees or daily/weekly payment requirements.
These loans can be a valuable lifeline for addressing urgent expenses or investing in opportunities, but borrowing beyond your means could lead to added financial pressure. Make sure the loan supports your long-term goals and that the repayment structure won’t disrupt your ability to operate smoothly. Responsible planning ensures you can take advantage of the funding without putting your business at risk.
Before applying for a bad credit business loan, it’s important to have a clear and specific plan for how you’ll use the funds. Because these loans are designed for businesses with credit challenges, lenders will often look at how well you understand your financial needs and growth strategy. Whether you’re using the loan to restock inventory, pay for essential equipment repairs, hire staff during a busy season, or stabilize cash flow, having a defined purpose ensures the funding goes toward high-impact areas.
A solid plan also helps you borrow the right amount—enough to meet your goals without overextending your budget. Knowing your intended use upfront can guide you in choosing loan terms that align with your revenue and repayment ability. With a targeted approach, a bad credit business loan can become a powerful tool to overcome financial setbacks and move your business in the right direction.
Bad credit business loans are a strong option if you’ve been turned down by traditional lenders but still need fast access to working capital. These loans are designed for business owners with credit scores below 650, and while the rates may be higher than those for prime borrowers, they provide a reliable way to get the funding you need when other options aren’t available. If you’re facing a cash flow gap, need to cover urgent expenses, or want to invest in short-term growth opportunities, this type of financing can help keep your operations on track.
However, it’s important to understand the terms—bad credit loans often have shorter repayment periods and higher payment amounts, so you’ll want to ensure the loan fits your budget. Carefully assess the total cost and repayment schedule to avoid creating unnecessary financial strain. Taking the time to evaluate whether this funding aligns with your goals can help you use it strategically and responsibly.
Several factors determine whether you qualify for a bad credit business loan, and while your credit score is considered, it’s often not the primary focus. Unlike traditional loans, lenders offering bad credit financing place greater emphasis on your business’s overall performance—especially your monthly revenue, cash flow, time in business, and banking activity. They want to see that your business generates consistent income and can handle the loan repayments, even if your credit history includes past issues. Other elements, such as your industry type, seasonal fluctuations, and how reliably you’ve managed financial responsibilities, can also influence approval. Since these loans are designed to be processed quickly, lenders typically use recent business activity as the main indicator of risk and repayment potential, helping them make fast, informed decisions.
The amount you can qualify for with a same day business loan is mainly based on your monthly revenue and business bank deposits. In most cases, lenders approve up to 70% or more of your average monthly deposits. For instance, if your business deposits $50,000 each month, you may be eligible for a loan of around $35,000 or more. Lenders look closely at your cash flow, deposit history, and overall business stability to determine how much funding you can receive. A strong and steady financial track record increases your chances of securing higher same day funding.
With a bad credit business loan, repayment typically starts soon after the funds are deposited and is handled through automatic daily or weekly withdrawals from your business bank account. For daily repayment plans, funds are usually debited each business day—Monday through Friday—excluding weekends and holidays. If you opt for a weekly plan, one fixed payment is withdrawn each week on the same day. This repayment structure is designed to be manageable, breaking down the total loan amount into smaller, more frequent payments that align with your business’s cash flow. It offers a predictable, straightforward way to stay on top of your loan without disrupting your daily operations, making it easier for business owners with bad credit to maintain financial control.
The cost of a bad credit business loan is primarily determined by the factor rate and the length of the repayment term. A factor rate is a fixed multiplier applied to the loan amount to calculate the total repayment—so if you borrow $30,000 at a factor rate of 1.25, you’ll repay $37,500 over the life of the loan, with $7,500 representing the cost of financing. Unlike traditional interest rates, the factor rate doesn’t accrue over time, meaning your total repayment amount is set from day one. This transparency helps you understand exactly what you’re paying. Depending on your agreement, payments may be made daily or weekly, allowing you to break down the total cost into smaller, manageable portions that fit your business’s cash flow. Even if your credit isn’t perfect, this structure offers fast funding with predictable terms so you can plan ahead confidently.
This is likely one of the most important benchmarks you will use to compare lending options. If one lender offers a better interest rate than the other and all other things remain the same you can have a good idea of the rate comparison. You must keep in mind that different products such as credit cards or car loans work using traditional financing interest rates and APR, but many alternative funding programs quote in a factor rate or annualized interest rates so try to compare options based on the types of loans they are most similar to. And ultimately it will come down to what you have to pay back when all is said and done.
When comparing lending options, whether quoted in factor rates, interest rates, or any other framework, what is most important is what you will pay back when all is said and done. For this reason you should always try to look at what you will pay over the entire life of the loan.
Yes. If the lender reports payments to commercial credit bureaus and you repay the loan on time, a bad credit business loan can help build or improve your business credit profile over time. Just ask your business loan expert at the lender of your choosing.
Typically 3 to 6 months. Many lenders require at least 3–6 months of operational history, although some may approve startups with strong revenue or a solid business plan.
Yes, but they may still approve your application. Some lenders specialize in working with business owners who have prior bankruptcies or tax liens, especially if those issues have been resolved and your current cash flow is strong.
Yes. Some industries, like adult entertainment, cannabis, or firearms, may be excluded by certain lenders due to regulatory or reputational concerns—even if the business is legal.
Yes, in most cases. Lenders use your business bank account to review cash flow and deposit patterns. It also allows them to set up automatic repayments.
Typically, you’ll need:
3–6 months of business bank statements
A voided check
A copy of your driver’s license
A business tax ID (EIN)
Basic business information (legal name, address, industry)
