Good news: Having a credit score of 500 can’t make a business loan impossible. However, the score is considered poor, so you need to look for a poor credit business loan. You also need to prepare for higher borrowing costs, including higher interest rates than lenders expand to strong credit borrowers.
To find the best business loans, compare multiple lenders and funding offers to find the lender who offers the lowest fees and favorable terms at the credit level. We looked up lenders to find the best business loans with a credit score of 500.
Compare the best small business loans with a 500 credit score
| Lender | It’s perfect for | Minute Credit Score | Bankrate score |
|---|---|---|---|
| SBA Micro Loan | Affordable business loans | It’s 500, but there may be no credit requirements | n/a |
| Funding | Low revenue requirements | 450 | 4.7 |
| Outside | Fast Business Loan | 570 | 4.6 |
| Bank of America | Credit building credit line | It has not been stated | 4.3 |
| Kiba | Crowdfunding | Don’t check credits | 4.3 |
| PayPal | Credit Check Business Loan | No working capital loans | 4.2 |
| No cap | High production startup | None; dependent on other business factors | 4.1 |
SBA Micro Loan: Perfect for affordable business loans
SBA Microloans are government-supported small business loans designed to support businesses that are commonly turned down by traditional lenders. These loans offer loan sizes up to $50,000 and SBA interest rates ranging from 8% to 13%. These features are offered in the hopes of offering manageable loan payments to underprivileged businesses.
You can find SBA microloans via approved microrenders. It is usually a nonprofit organization dedicated to educating small business owners and helping businesses grow. But like most types of SBA loans, the affordable cost is that it takes 30-90 days to complete the funding process.
Funding: Ideal for low revenue requirements
Fundible offers the best blend of online business lending and generosity for credit and revenue. First, lenders accept low revenues of as much as $96,000 a year. The loans provided at the minimum amount of revenue include equipment financing, bridge loans and bill financing.
The fundable representative said in addition to the relaxed revenue requirements, FinTech lenders are working with business owners with credit scores as low as 450. Officially, all three of these business loans require a lowest personal credit score of 500. This requirement makes funds one of the most accessible lenders in the market for poor credit borrowers.
Fundible offers business lines to business owners with personal credit scores of over 580. However, this loan has higher orders for revenue, and requires at least $200,000 a year.
Fora Financial: Perfect for high-speed business loans
Fora Financial is separated as an online lender who grants high business loans within 24 hours. Small business owners can opt for short-term working capital loans, credit facilities or advance payments. This is equivalent to merchant’s cash advance. The loan offers a wide range of loans starting at $5,000, and goes up to $1.5 million.
Online lenders can find that they can confirm approvals more quickly within 24 hours, but traditional banks can take weeks to approve a business loan. Fora Financial gives online lenders the opportunity on small or large business loans with typical relaxed lending requirements.
Bank of America: Perfect for credit building lines
The Bank of America lineup includes a variety of business loans built to a variety of needs, ranging from revolving loans to equipment loans to one-off loans for designated purposes. That cash-only business line is one of the most unique loans and is designed to help you build business credits and start a relationship with this lender.
Bank of America allows you to open this credit line with a deposit of at least $1,000 or more. A security deposit acts as an available credit limit. Over time, Bank of America will graduate your business to the standard, unsecured business line after you are eligible.
Kiva: Perfect for crowdfunding
Kiva is one of the most maintained secrets in business lending where business owners can get loans without revenue or credit score requirements. This innovative company blends key elements of business loans with crowdfunding to provide the necessary funding. Small business owners start by reaching out to a network of family and friends and funding the project within 15 days.
Once private funding is over, business owners can publish their funding needs for Kiva’s network of over 1.9 million lenders. Unlike traditional loans, Kiva business loans do not charge interest or loan fees. Kiva is perfect for microloans worth over $15,000.
PayPal: Perfect for business loans without credit
PayPal offers exclusive business loan offers to small businesses that already use payment processing platforms. PayPal merchants can opt for working capital loans or short-term loans.
PayPal working capital loans require no credit checks at all. This is a rare find in business lending. Instead of using credit, you are eligible based on the sales you bring through PayPal. You will then repay this loan through a percentage of business sales until the loan is repaid.
The terms of loan are flexible. With PayPal business loans, you can pay back your business loans in 17-52 weeks. With working capital loans, you choose a repayment plan that tells PayPal that the percentage of sales that will be applied to the loan.
No cap: Perfect for high production startups
Without a cap, we provide working capital funds and credit lines through online lending. Rather than using credit, they rely on direct revenue reports to approve the loan. Once you apply, you can connect your business bank account to FinTech lenders to assess your current and future revenue. You can then fund business loans of between $10,000 and $2 million.
These loans evaluate one-off fees, called the base fee, which are billed as a percentage of the overall loan, such as 0.80%. Uncapped will also provide a line of credit, allowing you to access funds as needed, up to $2 million.
How much loan can I get with a 500 credit score?
Even if you have a credit score of 500, you can still qualify for a $2 million loan. However, the exact amount depends on factors such as revenue and how willing the lender will provide you. Some lenders only have a low loan amount to a poor credit borrower, such as under $250,000.
The type of business loan you want also plays a role in the amount you can receive. SBA Microrender offers loans up to $50,000, with some without credit score requirements. Equipment Loans may provide you with a loan amount up to the purchase price of the equipment. The equipment then acts as collateral to assist with the loan. Additionally, Invoice Financing offers 70% to 90% of your invoice loans. Choose the type of loan that best suits your business’s financing needs.
How to Choose a Small Business Loan for a 500 Credit Score
Small business owners with a credit score of 500 must find the right lender and complete the additional foundations when applying for credit. These measures could increase the likelihood of approval.
1. Know your credit score
If you know you have a bad credit, it is best to check your exact credit score to know your benchmark when applying for a business loan. Most lenders have set minimum credit requirements to get approval for bad credit business loans. To apply for that lender, you must meet the lender’s minimum credit score requirements.
For business loans, the lender can view your individual or business’s credit history. You can establish a business credit by working with a vendor that offers trade credits or paying the fees with a business credit card.
2. Find the right type of business loan for bad credit
Getting approval for a business loan may lead to choosing the right type of business loan for bad credit. You should check the credit score requirements for some loans, such as short-term business loans and credit lines. Others like Merchant Cash Advance are specifically designed for bad credit borrowers.
- Short-term loans: In many cases, a short repayment term loan with a limited amount of less than two years
- Credit Business Line: Reusable credits can be withdrawn at any time once approved
- Microloan: Small loans offered as traditional alternatives or SBA loans. SBA loans allow you to borrow up to $50,000
- Invoice Funding: Approved based on the percentage of outstanding invoices and repay once the invoice is resolved
- Merchant Cash Advanced: Funding approved based on future debit or credit card sales and repaid from a percentage of future sales
- Safe Business Loans: If you have collateral to support the loan, the lender will take on less risk and will be more willing to approve you for a business loan.
3. Shop Peripheral: Compare eligibility requirements and costs
Once you know your financing needs and narrow down your financing options, you can find the best credit business loans available. Start by searching for loans and lenders that accept your credit score. If available, prequalify with multiple lenders to check the qualifying loan terms without performing a hard credit check.
Next, compare multiple loan offers from different lenders. Your goal is to find offers with the lowest interest rates and fees, including long repayment terms and more, as well as the best features your business will be eligible for. Some lenders require collateral or require you to sign a personal guarantee. This will allow you to be personally liable for repayment of your loan.
4. Find a co-signer
If your credit is too low and your business loan is being denied, you may be able to secure funds with a co-signer. However, make sure that the co-signers fully understand their responsibility. If you are unable to repay your business loan, the co-signer is responsible for making the payment on your behalf. If they’re not ready to do so, you could ruin their credit history and ruin their relationship with that person.
Conclusion
Get a business loan with a personal credit score of 500, and you can find the right loan and move forward with the best applications. Although options are limited, you can find lenders that specialize in either alternative or business loans due to poor credit. Once you know your options, you can compare your loans with the most affordable rates and features that are best suited to your financing objectives.
