Getting a traditional bank loan when you have bad credit is generally difficult, and getting small business loans for people with bad credit is no exception. A bank is generally not going to be willing to work with you unless you have a credit score above 650 (sometimes 620).

If your credit score is under 650, you will probably have to look at other options because you aren’t a healthy risk for a bank. Banks aren’t in the habit of lending money to people who have struggled to pay their bills, especially if their business isn’t producing well. This means that you’ll either have to find a cosigner or look at other options.

Other Options

A very viable and unique option is the business cash advance loan. They aren’t the cheapest option out there in fact you can expect to pay a lot to be able to use this type of loan. However, if it’s your only option and you have enough cash flow coming to pay for it, it can be a lifesaver. I would definitely recommend thinking this type of loan through because the interest (they call it fees usually) can be quite extreme. Since getting bank-provided small business loans with bad credit is almost impossible, this might be your only option.

Getting this type of business loans is generally quite easy, as long as you accept credit cards. This takes most of the risk away from the lender, since they can tie into your credit card system to get their payments. This is a lot like a traditional payday loan or cash advance where they prefer that you get direct deposit from your job. That allows them to ensure that their payments will be available for quick withdrawal from your bank account.

Another option that you may not have considered is taking out a home equity loan. This is usually an easier loan to get than a business loan because it’s collaterized. That significantly lowers your risk with the bank and allows you to get a much lower interest rate. Using a cosigner for this option is also an option and can lower your interest further if the person who cosigns has solid credit.