Need a business loan but have bad credit? We break down the best options including SBA 7(a), SBA 504, secured credit cards, and alternative lenders that prioritize revenue over credit scores.
Getting a business loan with bad credit feels like a catch-22: you need capital to grow, but lenders won't touch you because of your score. The good news? Several loan programs and lenders look beyond FICO — focusing on your revenue, cash flow, and business potential instead.
Here's what you need to know and which options are worth your time.
Traditional banks rely heavily on personal credit scores, but alternative lenders and government-backed programs take a broader view. The SBA, for example, considers your overall business health, industry experience, and ability to repay — not just a three-digit number.1
Many online lenders also use factor rates instead of APR, and they weigh monthly revenue more heavily than credit history. If your business generates consistent income, you have options even with a score below 600.2
The SBA 7(a) program remains the gold standard for small business financing, even for borrowers with imperfect credit. These loans offer capped interest rates, long repayment terms (up to 25 years), and flexible use of funds — working capital, equipment, real estate, or refinancing debt.
Why it works for bad credit: The SBA guarantees up to 85% of the loan, reducing lender risk. While you'll still need a credit score of at least 600–650 for most lenders, the program's underwriting considers your entire business profile.2
| Feature | Detail |
|---|---|
| Loan amounts | Up to $5 million |
| Terms | Up to 25 years (real estate), 10 years (equipment), 7 years (working capital) |
| Rates | Prime + 2.25% to 4.75% |
| Best for | Established businesses needing substantial capital |
If you're buying real estate or major equipment, the SBA 504 program offers below-market fixed rates with only 10% down. A Certified Development Company (CDC) provides 40% of the financing, a bank covers 50%, and you put up just 10%.
Why it works for bad credit: The program is asset-backed, so lenders are more comfortable with lower credit scores. The fixed-rate structure also protects you from rising interest rates over the 10-, 20-, or 25-year term.
| Feature | Detail |
|---|---|
| Loan amounts | Up to $5.5 million (typically) |
| Terms | 10, 20, or 25 years |
| Rates | Fixed, typically 3–4% above 5-year Treasury |
| Down payment | 10% |
| Best for | Real estate and heavy equipment purchases |
Lili's business banking platform combines no-fee banking with credit-building tools. Their secured credit card reports to major credit bureaus, helping you establish a business credit profile while you manage daily finances.
Why it works for bad credit: The secured card requires a refundable deposit, so approval is nearly guaranteed. On-time payments get reported to credit bureaus, gradually improving your score for future borrowing.
| Feature | Detail |
|---|---|
| Monthly fees | $0 |
| APY | Up to 1.50% |
| Credit building | Reports to Experian, Equifax, TransUnion |
| Best for | Startups and sole proprietors building credit from scratch |
Valley Bank offers a secured business credit card that functions like a traditional revolving line of credit. Your credit limit matches your security deposit, and responsible use helps rebuild your score over time.
Why it works for bad credit: Since the card is fully secured by your deposit, Valley Bank approves applicants who wouldn't qualify for unsecured credit. The card reports to business and personal credit bureaus, creating a dual benefit.
| Feature | Detail |
|---|---|
| Deposit range | $500 – $25,000 |
| Credit limit | Equal to deposit |
| Reporting | Business + personal credit bureaus |
| Best for | Rebuilding credit while accessing revolving credit |
First National Bank of Omaha (FNBO) offers business credit cards designed to help you separate personal and business expenses while building a dedicated business credit profile. Their underwriting considers business revenue alongside personal credit.
Why it works for bad credit: FNBO evaluates your business's financial health — not just your personal score. If your business shows consistent revenue and you have a clear plan, approval is possible with fair credit.
| Feature | Detail |
|---|---|
| Credit limit | Based on business revenue |
| Rewards | Cash back on business purchases |
| Reporting | Business credit bureaus |
| Best for | Separating business/personal credit and building business history |
| If you need... | Best option |
|---|---|
| Large capital, low rates, long terms | SBA 7(a) |
| Real estate or equipment with fixed rates | SBA 504 |
| To build credit from scratch | Lili secured card |
| Revolving credit while rebuilding | Valley Bank secured card |
| Business credit profile establishment | FNBO business card |
Bad credit doesn't mean no credit. SBA loans offer the best terms for established businesses, while secured cards and alternative lenders provide pathways for startups and credit rebuilders. Focus on lenders that evaluate your revenue and business health — not just your FICO score.
And once you get approved, make every payment on time. The fastest way to better loan options tomorrow is responsible borrowing today.
Disclosure: We may earn a commission if you click through our links and apply for these products. This helps us keep our content free and independent.
This page was written by the engine and the engine is still on the line. The conversation below picks up where the article stops.
Yes — the picks above are the engine's current verdicts. Ask a sharper version of this question below and you'll get a custom answer with the latest pricing.