Obtaining financing for your business can prove to be a daunting task if your credit score is less than satisfactory. Having a poor credit score can be a significant obstacle when it comes to obtaining loans or credit cards. It can also affect your ability to rent an apartment or get a job. Improving your credit score takes time and effort, but it is possible with the right strategies and discipline. Entrepreneurs with suboptimal or average personal credit scores can also access business loans. These loans have greater costs and shorter terms than conventional loans for people with good credit. Below, we have compiled a list of the best credibly legit small business loans, along with some helpful tips to assist you in selecting the ideal loan for your business needs. So, keep reading!
Can I Get a Business Loan With Bad Credit?
If your credit score is bad, securing business loans from a financial institution like a bank or credit union may be challenging. However, it is worth noting that alternative lending options, such as online and nonprofit institutions, can provide loans for business ventures to individuals with suboptimal credit scores.
The Top Best Small Business Loans for Bad Credit
The top best small business loans for bad credit include the following:
#1. Lendio
If you require adaptable financing options, we recommend considering a small business line of credit offered by Lendio. This line of credit option is ideal for small business owners with poor credit as it requires only a credit score of 560, and provides the flexibility of using funds as per your requirement without any obligation. Moreover, there are no charges incurred for the funds that remain unused. A line of credit is often perceived as a safety net by many individuals, as it provides a source of funds that can be accessed if necessary.
#2. OnDeck
This is one of the best small business loans for bad credit scores. This lending option is particularly advantageous for recurring loans as it offers the opportunity to request additional funds once 50% of the initial loan has been repaid. Additionally, it accommodates a minimum credit score of 625 and expedites same-day funding. Provided that your business has been operational for a minimum of one year, possesses a business bank account, and generates annual revenue of at least $100,000, you are eligible to submit a loan application.
#3. Bank of America
Bank of America is a prominent financial institution in the United States that provides a range of secured and unsecured loan alternatives. The financial institution provides a monetary secured line of credit that can transition into an unprotected line of credit through an automated process. The minimum deposit required for Bank of America’s cash-secured line of credit is $1,000. The online platform facilitates the completion of the application process. The eligibility for an unsecured line of credit is assessed after 12 months. This feature can aid in establishing credit, as not all creditors report loans and lines of credit to the financial bureaus.
Entrepreneurs who operate small businesses with a minimum of $50,000 in annual revenue and have been in operation for at least six months meet the eligibility criteria for application. This option may be suitable for individuals who do not require instantaneous financing but instead seek to establish business credit and enhance their likelihood of obtaining more cost-effective loan alternatives in the future.
#4. RapidFinance
Rapid Finance offers a maximum borrowing amount of $1 million, subject to your recurring revenue, and loan terms that extend up to 60 months. The lender will evaluate the overall financial health of your business, taking into account various factors beyond your personal or corporate credit score, to ascertain the eligibility of its operations for funding. These factors render it the most suitable alternative for long-term funding with unfavorable credit, making it the optimal small business loan alternative.
#5. Credibly
This is one of the best small business loans for bad credit scores. Credibly provides expedient funding solutions to small and medium-sized enterprises while minimizing the associated difficulties. In addition, credibly provides a diverse range of loan options, such as operational funding, merchant cash advances, supplies secured loans, and factoring bills, through an ecosystem of collaborative creditors. Credibly’s accessibility surpasses that of other lenders. The majority of the loans offered by the organization necessitate a minimum credit score ranging from 500 to 600 and a yearly income of $180,000.
Entrepreneurs who operate small businesses and have suboptimal credit scores, but can repay their loans within a brief timeframe, can derive significant advantages from Credibly’s expeditious and adaptable financing options.
#6. Kiva
Kiva is a non-profit organization that provides microfinance services to individuals worldwide. It offers business owners in the United States the opportunity to obtain no-interest loans and avail themselves of free marketing services through the Kiva platform. Furthermore, kiva is particularly suitable for businesses that enjoy robust community backing, given its reliance on charitable contributions and investment. It is also advantageous for businesses that prioritize prompt funding without incurring interest.
Legit Small Business Loans
The best legit small business loans include the following:
#1. BlueVine
This is one of the top legit small business loans as the account and credit line services are available to businesses through Bluevine. A business line of credit is a revolving line of credit from which a company can borrow money and make periodic payments. However, it’s worth noting that the Bluevine line of credit requires weekly or monthly payments and has a high annual percentage rate.
To apply for a Bluevine line of credit, you need to have a limited liability entity or corporation with at least 24 months of company history. In addition to a consumer credit score of at least 625, the company’s monthly sales must be at least $40,000. Business owners should also take into consideration that Bluevine charges a $15 instant funding fee for direct money transfers. There is no fee for ACH transactions, but it could take three business days for the money to show up in your account.
#2. Fundbox
One of Fundbox’s premium features is available without cost and allows you to link your business’s supported accounts to get forecasts of your company’s cash flow based on past performance. You can model your company’s fiscal future by adding hypothetical transactions, and the system will send you notifications if your financial position falls below a certain threshold you set. Unfortunately, Insights is still in beta form, so it may not be made available to all businesses.
There are no upfront costs or charges for prepayment with Fundbox. However, using the line of credit incurs draw fees, and overdue payments have a grace period of only 3 days. Fundbox needs three months of business checking account use before qualifying for a loan or line of credit.
#3. Kabbage
This is also one of the top legit small business loans. Kabbage, a subsidiary of American Express, provides cash flow management services and business credit lines. Qualified business owners can get $250,000 or more credit lines with 6, 12, or 18-month payback plans. Clients should choose the shortest repayment time possible, because Kabbage’s monthly cost rises according to the loan’s tenure.
#4. Fora Financial
Fora Financial is also among the top legit small business loans since their loan terms are adjustable for up to 15 months, their application process is straightforward, and they give loans of up to $1.5 million to small businesses. That’s a shorter term than you may get with other lenders, but it also doesn’t include as much accrued interest. Also, you won’t be stuck making payments on a loan long after it’s no longer worth what you originally borrowed.
Another benefit of Fora’s short-term loans is that neither collateral nor personal guarantees are required. It eliminates a potential stumbling block when trying to get a loan. Fora Financial is a rare lender in that it does not impose any hidden costs. You just make payments toward the loan’s principle and interest.
#5. Balboa
Balboa Capital is also one of the top legit small business loans because it’s simple to apply for a company loan using their service. This lender doesn’t demand hours of online form filling or scanning and submitting papers. A quick decision on your application is also guaranteed.
Credibly Business Loans
Credibly is a financial institution that operates as a direct lender, with a particular focus on providing unsecured business loans. Established in the year 2010, this enterprise has garnered commendable recognition for its rapid growth and development, earning coveted positions on two prestigious indices – Crain’s New York and Inc. 5000 in the years 2014 and 2016. The process of credibly business loans can be completed in its entirety through the utilization of online resources and may be accomplished within a brief span of one to two days. The most favored financing alternative offered by Credibly business loans is its operational loans. The spectrum of loan disbursements spans from $5,000 to $400,000, with the potential for your enterprise to be eligible for a sum equivalent to 150% of its mean monthly payments.
Following receipt of the loan cash, your organization will make daily payments for 6-15 months. Having multiple finance avenues open to a small business owner is a huge plus. This is one of Credibly’s primary selling points, as the company provides small businesses with access to at least six distinct sorts of funding choices. Products including operational loans, lines of credit, SBA loans, supplies finance, invoice factoring, and payday loans for merchants are all available to small businesses. Credibly business loans are also a lending company that partners with other lenders to offer supplemental services in addition to working capital loans and merchant cash advances. However, it might not be appropriate in all situations.
What Makes Credibly Business Loans Unique?
Credibly offers a diverse selection of business loans that cater to varying loan amounts and versatile applications. These funding solutions are also available to used car shops, medical offices, law firms, and real estate organizations, which generally struggle to obtain financing. However, it’s important to note that not all industries are eligible to apply for this opportunity. For instance, non-conventional high-risk sectors such as cannabis will not meet the criteria. This online lender is faster than banks and credit unions. Meanwhile, it should be noted that other online lenders offer even faster processing times. Daily repayments offer a convenient way for businesses to gradually reduce their loan balance through smaller, more frequent payments. Nevertheless, businesses with erratic cash flow may not qualify for this financing.
Can I Get a Business Loan With a 500 Credit Score?
Indeed, it is possible to obtain a loan for a small enterprise despite having a poor credit score. Your business’s financial health is more important than your credit score. Many lenders require six months in business, $30,000 in sales, and a 500 credit score.
What Credit Score Is Needed for Sba Business Loan?
To qualify for the SBA 7(a) loan, it is necessary to have a credit score of at least 640. Having a credit score of 680 or higher can enhance your likelihood of obtaining approval for an SBA loan.
What Is the Easiest SBA Loan to Get?
SBA Express. Borrowers can choose between an SBA-backed term loan or line of credit with competitive fixed or variable rates. Fast approval and flexible terms make the application procedure easy. Small business owners like this option since it needs lesser down payments than standard loans.
In Conclusion
Small business loans are a valuable resource for entrepreneurs seeking to expand their operations, cover payroll expenses, purchase supplies, or oversee cash flow. Securing a loan with poor credit can prove to be a challenging task. However, there exist numerous loan options that cater to individuals with credit scores as low as 500. Certain lenders do not impose a minimum credit score requirement, opting instead to evaluate the overall health of the business. We hope this article provides you with valuable insights and knowledge.
References
- nerdwallet.com
- bankrate.com
- lendingtree.com
- finder.com
- investopedia.com
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