---
title: "Business Loans for Bad Credit: What You Can Get"
url: "https://www.fundbetter.com/blog/business-loans-bad-credit/"
description: "Which funding a low personal credit score still reaches, what the score costs you in rate and term, and how to spot the offers worth walking away from."
---

[Blog](https://www.fundbetter.com/blog/) [Funding Guides](https://www.fundbetter.com/blog/category/funding-guides/)

# Business Loans for Bad Credit: What You Can Get at 500

 September 11, 2026 8 min read by [FundBetter](https://www.fundbetter.com/) Share

## Five Products Open at 500, Three Stay Closed

At a 500 personal credit score, five funding types are generally reachable: a short-term business loan, a line of credit, equipment financing, invoice factoring, and revenue-based financing. Three aren't. A merchant cash advance starts at 520, while long-term loans and SBA financing want roughly 700 and a multi-year filing history behind it.

Those are FundBetter's thresholds, and the reason they matter is that no regulatory definition of bad credit exists. Every lender draws its own line, and the lines sit far apart. A bank may stop at 680 where FundBetter starts at 500, so the same applicant can collect three different answers in one afternoon. A decline is information about one lender's risk appetite rather than a ruling on whether your business can be funded.

## Why Revenue Can Outweigh the Score

A credit score describes how a set of personal accounts have been paid. It says nothing about whether $22,000 a month is currently moving through your business account, and for a lender underwriting a twelve-month repayment, the second fact predicts more than the first.

That's the reasoning behind revenue-weighted underwriting, and it's clearest in [financing that flexes with monthly sales](https://www.fundbetter.com/business-loans/revenue-based-financing/). The lender reads your deposits, your daily balances and your existing obligations, then sizes an amount those numbers can carry. The score still matters, but it becomes one input among several rather than the gate everything passes through.

It also explains why documentation is light. Bank statements are the evidence, so approvals turn on a few months of deposits rather than on a credit narrative you'd have to explain in person. For the full picture of [what lenders check on an application](https://www.fundbetter.com/blog/business-loan-requirements/), revenue and tenure do most of the work below 600.

## Which Products Still Reach You Below 600

A low score narrows the menu rather than emptying it. What closes first is the long, cheap, patient money. What stays open is shorter, faster and priced for the risk.

| Product | Credit bar | What it underwrites |
| --- | --- | --- |
| Invoice factoring | Customer-weighted | Your customers' credit, not yours |
| Merchant cash advance | 520+ | Monthly card sales |
| Revenue-based financing | Revenue-weighted | Consistency of monthly revenue |
| Short-term loan | 500+ | Deposits and existing debt |
| Line of credit | 500+ | Deposits and existing debt |
| Equipment financing | 500+ | The equipment as collateral |
| Long-term loan | 700+ | Multi-year financial history |
| SBA loan | Strong profile | Profitability and full documentation |

The pattern is worth naming. Every product that stays open below 600 does so by underwriting something other than your score: an invoice, a card terminal, a deposit history, a machine. The clearest case is [advancing against unpaid invoices](https://www.fundbetter.com/business-loans/invoice-factoring/), where a weak personal file barely enters the decision at all. Where nothing else is available to underwrite, the score becomes the whole decision and the door shuts.

## What the Score Actually Costs You

Approval and price are separate questions, and a low score answers the second one loudly. Expect three things to move against you at once.

**The term shortens.** A lender uncertain about the next five years will happily look at the next nine months, so repayment gets compressed and the periodic payment rises even when the amount borrowed is modest.

**The amount shrinks.** Offers tend to land at a smaller multiple of monthly revenue than the same business would see a hundred points higher.

**The cost rises.** This is the part worth doing arithmetic on rather than feeling your way through, because [a merchant cash advance](https://www.fundbetter.com/business-loans/merchant-cash-advance/) is quoted as a factor rate while [a short-term business loan](https://www.fundbetter.com/business-loans/short-term-business-loans/) is quoted as a rate over time. Those two numbers aren't comparable as written. Work out the total dollars repaid and the number of weeks you'll be paying, and compare those instead.

## The Offers Worth Walking Away From

A low score makes you a target, and the sharpest operators in this market advertise directly to people who have just been declined somewhere else.

The FTC's guide to [scams that target small businesses](https://www.ftc.gov/business-guidance/resources/scams-your-small-business-guide-business) names the tactics plainly: manufactured urgency designed to stop you checking the claim, demands for payment by wire transfer, cryptocurrency or gift card, and sales agents who ask owners to sign blank documents or withhold copies of what was signed. It also flags a pitch aimed squarely at this audience, selling unnecessary services on the false claim that you must pay to improve your business credit report.

Three rules cover most of it. Never pay a fee to receive a loan, because legitimate costs come out of the funding rather than into it beforehand. Never sign a document you haven't been given a copy of. And treat a lender who won't state the total repayment in dollars as one who has a reason not to.

One more, specific to this end of the market: be careful about stacking. Taking a second advance while a first is still being repaid puts two daily debits against one deposit stream and is a common route from a cash flow problem into a solvency one.

## Moving the Score While the Business Keeps Running

Waiting for a score to recover is rarely realistic when payroll is Friday, so the practical approach is to fund the business on what it can qualify for now and repair the file alongside it.

Paying a short-term facility as agreed is itself repair, since consistent repayment is exactly the record that was missing. Pulling personal balances down below roughly a third of their limits tends to move a score faster than anything else available to you, because utilisation reweights monthly rather than annually. And separating personal and business banking gives the next underwriter a clean deposit history to read, which matters more each time you apply.

Businesses that come back for a second round frequently qualify for something cheaper than the first, not because the score jumped but because there are now twelve more months of deposits and a completed repayment on file. That's also when [a business line of credit](https://www.fundbetter.com/business-loans/business-lines-of-credit/) tends to come within reach, and it's the cheapest form of readiness there is, since an open line with no balance costs nothing to keep.

## Where This Shows Up Most

Two patterns account for a large share of low-score applications, and neither is a badly run business.

The first is a trade where the owner personally financed the equipment early on. An [auto repair shop](https://www.fundbetter.com/industries/auto-repair/) that put a lift and a scan tool on personal cards has a utilisation problem rather than a payment problem, and the score reads the same either way. The second is a business that grew through a rough patch, where [salon and spa owners](https://www.fundbetter.com/industries/beauty/) often carried a build-out on personal credit and never got the balances back down once the chairs filled.

In both cases the deposits tell a better story than the score does, which is the entire argument for underwriting revenue. If your bank statements look stronger than your credit report, say so early and put the statements in front of someone.

## Not Sure Which of the Five Are Open to You?

All five products that stay reachable at 500 underwrite something other than your score, so which one fits depends on whether you invoice other businesses, run card sales, or simply need a reserve on standby. [See if you qualify](https://www.fundbetter.com/apply/) rather than guessing at it. The initial check is soft, so a weak file costs nothing to test.

The answer comes back with what each option would actually cost, including the ones we would tell you to skip. If two options land close together, [have one of our advisors read your file](https://www.fundbetter.com/contact/) and say which one actually wins.

## Frequently asked questions

 Can I get a business loan with a 500 credit score?

Often yes, through revenue-weighted products rather than traditional term loans. At FundBetter a typical approval starts around 500 for working capital and short-term funding, provided the business shows roughly $15,000 or more in monthly revenue and at least six months of trading history.

 Which business funding ignores credit score entirely?

None ignores it completely, but invoice factoring comes closest, because the advance rests on your customers' creditworthiness rather than yours. If you invoice financially solid business customers on net terms, a weak personal file matters far less than it would elsewhere.

 Will a bad credit business loan cost more?

Yes. Expect a shorter term, a smaller amount and a higher total cost than the same business would be offered a hundred points higher. Compare offers on total dollars repaid and the number of weeks of payments, since factor rates and annual rates aren't directly comparable.

 Does checking my options lower my score further?

No. The initial check is a soft credit pull, which isn't visible to other lenders and has no effect on your score. A hard pull happens only if you accept an offer and proceed, so comparing options costs you nothing.

 How quickly can a low score improve?

Credit utilisation reweights monthly, so bringing personal balances below roughly a third of their limits can move a score within a couple of billing cycles. Missed payments take considerably longer to age off, which is why repaying current funding as agreed does double duty.

## Funding mentioned in this guide

 [Merchant Cash Advance](https://www.fundbetter.com/business-loans/merchant-cash-advance/)[Revenue-Based Financing](https://www.fundbetter.com/business-loans/revenue-based-financing/)[Short-Term Business Loans](https://www.fundbetter.com/business-loans/short-term-business-loans/) [Auto Repair funding](https://www.fundbetter.com/industries/auto-repair/)[Beauty funding](https://www.fundbetter.com/industries/beauty/) ★★★★★4.9 stars from real business owners Ready to apply for your business funding? Compare 8 funding options with one application and a real advisor. Funds in as little as 24 hours, no impact to your credit. [Apply Now](https://www.fundbetter.com/apply/) [or call 786-882-2705](tel:+17868822705)

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## Keep reading

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