Is There Such a Thing as Guaranteed Approval for Bad Business Credit?

Is There Such a Thing as Guaranteed Approval for Bad Business Credit?

Is There Such a Thing as Guaranteed Approval for Bad Business Credit?

The Best Startup Business Loans with Bad Credit

The short answer is no. There is no guarantee, but that’s not the complete answer. Loan applications and bad credit are like oil and vinegar – they don’t mix together well. Whether you’re searching for a small business loan or financing on the personal side, trying to find a lender who will let you borrow money with bad credit can be a frustrating process.

If you have bad credit and you’re searching for financing, statements like “guaranteed approval” and “no credit check loans” can be very appealing. Could a guaranteed business loan be the answer to all of your problems?

Not so fast. You should exercise extreme caution before you apply for any financing options that sound too good to be true.

The Guaranteed Approval Myth

Here’s the truth. When it comes to financing, there’s no such thing as guaranteed approval for bad credit.

Before you start to feel panicked, a poor credit score doesn’t mean it will be impossible to qualify for financing for your business. However, any promise of guaranteed approval should put you on guard.

At best, guaranteed approval promises may be a sign that you’re dealing with a predatory lender. At worst, the advertising you’re seeing might be a scam.

Bad Credit Score Financing Options

Although guaranteed approval for bad credit isn’t a real thing, there are lenders that specialize in working with business owners with bad personal credit scores or weak business credit history. Whether your personal credit is in bad shape or your business credit rating leaves a bit to be desired, there may still be viable options available to borrow money for your business.

Before we break down some of the options available, keep in mind that bad credit financing represents a higher risk to the lender. As such, these financing options often feature higher interest rates and less attractive terms than you might expect with traditional business financing. The same is true for a small business startup loan. Lenders like to see a track record, or history, making a startup loan problematic for a loan underwriter.

It’s a good idea to read the terms, conditions, and any other fine print before you fill out funding applications for your business. Make sure you understand the interest rate, the repayment term, whether or not they are going to want collateral, or if this will otherwise be a secured loan. This is a good rule of thumb no matter what the condition of your credit may be.

Here are three financing options you might want to consider if you need to borrow money with bad credit scores.

1. Small Business Credit Cards

Credit cards are often one of the easiest types of financing to qualify for, even with credit challenges. Since you’ll typically have to sign a personal guarantee to open an account, a small business credit card can be a good financing option if your business has poor credit but your personal credit is in good shape.

If you have credit problems on both the personal and the business front, your options as a borrower may be more limited. However, even in this situation you might still be able to qualify for a secured business credit card.

A secured credit card requires a security deposit, but typically features more lenient approval requirements in exchange. Provided you manage the account well, a secured business credit card could help you build better business credit for the future, making it possible to apply for more traditional business funding down the road.

While the rate on a secured business card may be higher, the good news is you can avoid credit card interest altogether as long as you pay your balance in full each month by the statement due date.

2. Online Business Lenders

With poor credit, your chances of walking into a brick and mortar bank or credit union and convincing someone to approve your loan application are pretty slim. A term loan from an alternative lender online who might be willing to work with your situation if you have less-than-perfect credit will be much easier than traditional lenders. A small business loan from an online lender, could be a much more realistic option—and has become the first-choice financing option for many businesses today.

In spite of a poor credit rating, your business may have other things going for it which would make lenders willing to take a chance on loaning your company money. If your business has other strengths, like steady accounts receivable or stable monthly revenue, your odds of qualifying for funding from an online lender may improve.

You can find several online lenders that offer alternative business loans, such as:

Keep in mind, subprime funding options from online lenders may come at a cost—including higher APRs, costly fees, shorter (or more frequent) payback time tables, collateral, and personal guarantees. Plus, even if the lender’s credit requirements are more lenient, you’ll still likely need to prove your ability to repay the loan.

3. Factoring

Factoring, or invoice financing is another option available to businesses that have a weaker credit profile. Factors are more interested in the credit strength of your customers than your profile, so they will often work with businesses that have a less-than-stellar credit history. There are many online factoring companies that make it easier and more accessible to factor invoices than it was in the past.

Factoring isn’t really a loan. In a nutshell, you are selling your accounts receivable to a third party (a factor) at a discount. He will pay you a percentage (usually around 85%) of the agreed-upon amount today and will pay the balance, minus their percentage, once they’ve collected from your customer.

There are some factors that will allow you to continue to collect from your customers, but you should expect that the factor will insist they do that. This might not be a small business loan in the traditional sense, but it is a way to leverage the value of your accounts receivable today rather than waiting for your customers to pay their invoices. This is a very popular way to finance business in the manufacturing and textile industry.

4. Crowdfunding

If you can’t qualify for traditional or alternative, or first-time business loans or you’re unwilling to pay the higher financing costs associated with such loans, crowdfunding might offer you a non-traditional way to access the business capital you need.

There are two primary types of crowdfunding options for businesses:

Equity crowdfunding requires you to hand over a percentage of your company to investors in exchange for capital. Reward crowdfunding involves reaching out to your customer base (or prospective customer base) directly and convincing them to make small investments in your business. In exchange, you will typically give these customers a reward, such as the opportunity to be one of the first to receive your company’s new product or service once it launches.

Online platforms like Crowdrise, Kickstarter, and Indiegogo can help you to launch and manage a crowdfunding campaign for your business. Check out Elyce Zahn’s crowdfunding success story if you’re looking for inspiration to start your own campaign.

On the plus side, crowdfunding isn’t a loan you have to pay back. With reward crowdfunding, you can almost look at the process as a presale of a service or product that you would likely have tried to market and sell to your customer base any way.

On the negative side, crowdfunding doesn’t always work and it’s far from a guaranteed source of financing. Many business owners who launch crowdfunding campaigns fail to meet their funding goals. With some crowdfunding platforms, if you don’t reach your funding goal you may forfeit the money that did come in for your campaign.

But when crowdfunding does work, it can be a big financial win for your business.

Building Better Business Credit for the Future

There’s no question that a good credit score – both business and personal – can help you to qualify for better business financing options. Good credit not only opens doors when it comes to financing, it can help you to secure loans and credit cards at a lower cost.

Looking to build your business credit? If your business credit isn’t where it needs to be, here’s a helpful guide you can use to improve your business credit in five steps.

Remember, it’s also wise to keep a close eye on both your personal and business credit reports and scores. You can monitor your business and personal credit in one spot by setting up a free account with Nav.

Good business credit is a crucial key to help you unlock better financing options for your business. Lenders will care about the condition of your credit, so you should care about it as well.

This article was originally written on May 16, 2019 and updated on May 17, 2021.

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Michelle Black

Michelle Lambright Black, Founder of and, is a leading credit expert with over a decade and a half of experience in the credit industry. She’s an expert on credit reporting, credit scoring, identity theft, budgeting, and debt eradication. Michelle is also an experienced personal finance and travel writer. You can connect with Michelle on Twitter (@MichelleLBlack) and Instagram (@CreditWriter).

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23 responses to “Is There Such a Thing as Guaranteed Approval for Bad Business Credit?

  1. Cheers
    Very good day I hope you are well

    Register a company in Florida called Atlantic1000 Financial Group which is a corporation dedicated to acquiring banks and financial companies outside the United States for potential.

    Many fascinating ideas and an excellent business plan, I just need a loan to start this fabulous project.

    I would like to know if there is any possibility of obtaining a loan with you to start this project.

    Thank you very much in advance, I await your prompt reply.

    1. I’m trying to restart my business 40000 start up will purchase and get me started enough to continue my business with no issues my personal credit got in the way due to medial issues and covid 19 issues / divorce. Who can help me maverik?????

  2. I am still trying to find a start-up business loan. I have bad to OK credit. Can you help me? The only reason that I am asking is that I have looked everywhere, and I have noticed a couple of things. First of all, companies that say they can help me, really can’t. For instance, a number of the companies that you have listed that say they have start-up business loans, really don’t offer them. Can you really help me or our just going to give the standard line? The reason why this email sounds like this is that I am just very frustrated by sites like this that they can help, but really can’t. I believe in truth in advertising.

  3. I am currently employed in a corporate salon as the salon lead. We are closed because of current events. I may have the opportunity to be the owner of this salon. But won’t have a definitive answer until I have clarity as whether or not the corporation can reopen and/or is the current property manager can break their lease. There are 12 employees, 14 stations, and a gross annual revenue of approximately $500,000.00.
    Should this work in our favor I will need to apply for funding to cover start up expenses. Can or should I start the process of securing funding this soon?

  4. I have bad credit from past alot to do with identy theft. I’ve been in the landscaping business with another guy who wonts to sell out his part of a stablish business. I’m trying to get the money to buy him out. Already have 3 mother’s of work lined out pluss I have a 16000 thousdad dollar job starting Monday. I need 25000 thousand I need it soon. Can u help me

    1. Michael,

      If you have a Nav account (it’s free), I recommend you reach out to our credit and lending team for assistance. You can reach them through your account or by calling 844-636-2445.

  5. I am interested in purchasing a Chicken farm and don’t have good credit and I was wondering if yall could help.

    1. I have a business basically all the equipment to run it except for a few pieces. I’ve depleted my savings and don’t have stellar credit. I’m about finish paying for the building. Is there any help out there for me?

      1. I have a business basically all the equipment to run it except for a few pieces.I’ve depleted my savings and don’t have stellar credit. I’m about finish paying for the building,is there any help out there for me.