How to Get Business Funding with Poor Credit: Smart Options That Actually Work

• 04 Nov 2025 |
• Lion Investments |
• 2 Comments

How to Get Business Funding with Poor Credit: Smart Options That Actually Work

Getting funds for your business is tough, but it becomes even harder if your credit score isn’t great. Many traditional banks consider a low credit score a red flag and reject applications without looking at the full picture. But here is the truth: business funding with poor credit in the present.

Today, there are many smart, practical, and proven ways to get funding for your business, even if you have a low credit score. Whether you are operating a small shop, a startup, or a growing local business, there is always a path to move forward. Let’s explore the best funding options that actually work, even when your credit is holding you back.

Smart Options for Funding

In the following points, we have listed 10 options that can help fund your business, even if you have bad credit for some reason. Explore them, and choose the most suitable one to fulfill your funding needs.

Secured Loans

As an entrepreneur, if you have bad credit, secured loans are among the best ways to get business funding. In these loans, you offer an asset, such as gold, property, a vehicle, or other valuable things, as collateral. As lenders have something for security, they become more likely to approve your application and offer better interest rates, even when you have a low credit score. One thing to remember is that your asset remains at risk until you fully repay the loan.

Alternative and Online Lenders

Opting for online lenders can be another good option for business funding. They have more flexible criteria and focus on overall business health, cash flow, and revenue. Some companies, such as On Deck, BlueVine, and Fundbox, offer quick approvals and flexible repayment terms. You should remember that interest rates may be higher than a bank’s. You can work with a business funding consultant to compare offers from multiple online lenders and find a suitable one for your funding.

Merchant Cash Advances

Merchant Cash Advances can be useful for attaining funds if your business earns a steady revenue from card sales. In MCA, a lender provides you with a lump sum amount upfront, which you repay through a fixed percentage of your daily or weekly sales. This option focuses on daily sales, not on your credit, and requires no paperwork. However, MCAs have higher fees, so they are best for short-term needs.

Invoice Factoring or Financing

Invoice factoring or financing can help you maintain business cash flow if clients take time to pay their bills. Invoice factoring means you sell your due bills to a financing company at a discount & get instant cash. Invoice financing refers to borrowing money using invoices as collateral. This option is best for B2B businesses that regularly issue invoices.

Equipment Financing/Leasing

If you want to buy machinery, tools, or vehicles for your firm, equipment financing can help. In this option, you finance the equipment, which acts as collateral. Because of the collateral, lenders feel secure, and you get your equipment even with low credit. This option is best for manufacturing, logistics, and construction businesses that rely on tools and machinery.

Microloans

Do you need small business funding help? If so, you should opt for microloans. Nonprofits, community lenders, and organizations, such as Kiva, Grameen America, and Accion, provide these loans with flexible terms. The provided amount is up to $50,000. They have lenient credit requirements and focus more on business potential. You should use this option for short-term loans.

SBA Loans

SBA (Small Business Administration) loans are among the most trusted funding solutions for business owners with poor credit. The SBA does not lend you money, but guarantees a portion of the loan amount approved by banks. It potentially reduces the risk for lenders and increases the odds of approval. An SBA loan process is time-consuming but has lower interest rates, longer repayment periods, and fairer terms.

Personal Loans

Personal loans are one of the easiest ways to get business funding. You only need to have a steady income, a steady job, or a co-signer with good credit to get a personal loan and kickstart your business. The only risk is that you are responsible, so you must keep personal and business finances organized and borrow only what you can manage.

Funds from Friends and Family

Going to your friends or family members can be an emotional decision, but it’s one of the most flexible funding options for entrepreneurs with bad credit. It allows you to avoid strict credit checks or hefty interest, but you must maintain trust. If you take funds from friends or family, everything from the repayment plan to the agreed interest should be written down. This simple agreement can help avoid future misunderstandings and keep relationships healthy.

Crowdfunding

If you ask how to raise money to start a business, crowdfunding is one of the most creative ways to do so, especially if you have a great idea and a strong story. It allows you to raise money directly from the public. Kickstarter, GoFundMe, and Indiegogo are 3 popular crowdfunding platforms where you can share your story and product to attract support. If people love your idea, they will contribute small amounts that will add up to a large sum. It’s a great way to build both capital and community, and credit doesn’t matter.

Easy Business Funding

Do you need business funding with poor credit? If so, you are in the right place. We are Lion Investments, your perfect business funding partner. With an extensive network of financial partners, customized financial solutions, streamlined applications and approval processes, and integrated business advice, we serve all your business funding requirements. Contact us now and discuss your needs so we can offer tailored solutions.