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6 Choices for a Business Line of Credit Bad Credit

September 13, 2023
Business Line of Credit Bad Credit

Looking for a business line of credit; bad credit is an issue? A business line of credit is a bit like a credit card, but often without the plastic. Small business owners tend to covet them, particularly an unsecured business line of credit.

Why? Because, unlike with a small business loan, you only have to pay interest on what you draw, and not the entire amount you can tap. But there are usually credit score requirements. If you have poor credit, they may seem to be out of reach.

Until now.

Best Business Line of Credit for Bad Credit

Line of Credit #1 – Headway Capital

This alternative lender offers a line of credit and, “Our unique underwriting model looks at the big picture of your business and allows us to consider more than just your credit score.”

They will only perform a soft pull on your personal credit. 

Get a small business line of credit for up to $100,000. Repayment terms are 12, 18, or 24 months. Payment frequency can be either weekly or monthly. 

There are no real restrictions on usage; this online lender just wants you to use your business funding for “any legitimate business purpose”.

They also offer a merchant cash advance and a term loan.


You will have to have been in business for at least one year. Annual revenue has to be at least $50,000. Also, they do not offer business credit lines  (or even a small business loan) in Arkansas, Connecticut, Michigan, Montana, Nevada, North Dakota, South Dakota, or Vermont. 

Rates and Fees

The interest rate and credit limit a small business is awarded may vary based on the information provided in the credit line application. In other words, poor credit will most likely result in a higher interest rate.

However, at least interest does not compound and there is no annual or monthly service fee. The draws from your line of credit may be subject to a 2% draw fee. This is dependent upon your state. Also,you may be assessed a late fee for late payments.

If sufficient funds are not present in your bank account at the time of any scheduled payment, it is possible that a traditional lender like a bank will charge you a non-sufficient funds (NSF) fee. 

They will not charge a fee for early repayment of your balance. Each payment will include some proportion being credited toward your principal balance, rather than just interest.

Line of Credit #2 – National Funding

National Funding does not seem to offer an actual line of credit. But they do offer a small business loan for bad credit, and they also offer a short term loan. They also offer equipment financing and working capital loans for small businesses. 

National also specifically caters to businesses owned by women, minorities, and veterans of the Armed Forces.

Their bad credit business loan comes with one major perk—they are not averse to lending to risky businesses.

Short Term Loans

Their short term loan is available for business owners with bad credit. However, some of these loan products will come with a daily payment schedule. Their payback terms tend to range from six to eighteen months. 

You can get funding in as quickly as 24 hours.

Working Capital Loans

National will provide a working capital loan with a personal guarantee but there is no need for collateral as it’s not a secured business loan. Get fixed terms with automatic payments. Payments can be remitted daily or weekly with terms of four months up to 24 months.

There is no penalty for repayment. In fact, National offers an early repayment discount.

Equipment Financing Loans

Payments are remitted monthly. The terms are three to five years; get a loan for up to $150,000. 

This is for financing or leasing new or previously owned equipment. Also, the Section 179 tax deduction is applicable toward equipment-financed purchases and often has added value for business owners by allowing them to deduct up to 100% of the purchase cost. 

Industries and Risk

National does not seem to place too many (if any) restrictions on the industries that it will work with. This means higher risk industries should be able to get funding if they meet National’s requirements.

For example, this online lender will loan money to trucking companies, senior care businesses (nursing homes), and construction companies. They also don’t seem to have a true minimum credit score for qualifying.

Line of Credit #3 – American Express Business Blueprint (Formerly Kabbage)

Online lender Kabbage was bought out recently and no longer exists as a separate entity. The Kabbage line of credit program has been taken over by American Express. You will have to be in business for at least a year in order to qualify. 

Lines of credit most often run from $2,000 to $250,000. However, a business could be eligible for a larger line of credit based on AmEx’s evaluation of your business.

With AmEx, each draw results in a separate installment loan, and will be secured by business assets. These business loans will also all require a personal guarantee. 

Keep in mind that for this form of funding for your small business, a personal guarantee is a relatively common requirement when you have a bad credit score.

Applying and Qualifying

You will need to have a minimum credit score of at least 640 when you apply. A 640 credit score is considered to be “fair”.  They will perform a hard pull on your personal credit report when checking your application. 

Your business will have to have a monthly revenue of at least $3,000. You will also have to have a business checking account. However, they will not work with every industry. 

American Express offers six, twelve, or eighteen month loan term options with a corresponding monthly fee. Not all terms will be available to all applicants. You can connect your business accounts to your application, and thereby speed up the approval process.

Rates and Fees

You will only have to pay a fee on the amount you use, when you have an outstanding balance. 


To avoid potential confusion, please note: Business Blueprint is also the name of American Express’s business app, where you can access all credit card, loan, and line of credit data from one place.

Line of Credit #4 – Fundbox

Fundbox offers a business line of credit for up to $150,000. The application is fast and, if approved, a small business can have funding deposited into its account on the following business day. 


Your business has to be based in the United States, with annual revenue of $100,000 or more. Ideally, you should be in business for at least six months. You will need to have a business checking account.

Also, the business owner must have a minimum credit score of 600 or better, meaning that this is a business line of credit for bad credit.

How it Works

Apply, pay, and draw directly through their app. You can apply and not have your application impact your personal credit score.

Choose your own repayment plan, with no penalty for early repayment. Fundbox is now available through the Stripe dashboard. 

The Fundbox Flex Pay Account

If you create a Flex Pay account, the  details will be available in your dashboard. Copy the account and routing numbers and paste them into vendors’ payment platforms. 

Fundbox will use your Flex Account to pay your expenses when they receive the ACH request from your vendors.

When vendors debit a Flex Account, Fundbox will cover the expense—up to your available limit. Flex Pay helps to ensure that your payments are made on time. This gives you three extra business days to repay.

You can repay from your dashboard within 3 business days—with no fees when you pay by ACH. Otherwise, the outstanding amount will automatically continue as a draw on your available line of credit. 

This is up to your available credit limit (on a  twelve or 24 week term, based on your preferences). If you do not have enough credit available, Fundbox will debit the difference from your primary business bank account.

Line of Credit #5 – Bluevine

Bluevine offers a revolving line of credit. You can get a credit line for up to $250,000. Get a decision in as fast as five minutes. Pay back each draw with fixed monthly or weekly payments over six or twelve months.

A small business can use the line of credit for any business purpose; this online lender does not seem to put any usage restrictions on this form of business financing.


You will need to have a personal credit score of 625 or better, so this form of business financing still qualifies as a bad credit business loan. You cannot have any bankruptcies in the last three years to get their revolving credit line. 

Also, you will need to have been in business for at least 24 months. As a result, this isn’t really a business loan for startup financing. Your business will have to be a corporation or an LLC, and in good standing with your Secretary of State.

In addition, you need to be bringing in $40,000 in monthly revenue or more. Your business must have an active bank connection or bank statements for the past three months. 

There are some industries that they will not work with.

And finally, your business must be operating or incorporated in an eligible state. Ineligible states include Nevada, North Dakota, and South Dakota. 


Apply on their website. They will want either a connection directly to your business bank account or review three or more months’ worth of bank statements.

Ineligible Industries

Bluevine will not lend or approve a line of credit for the following industries:

  • Illegal gambling
  • Pornography and paraphernalia
  • Political campaigns
  • Firearms and their paraphernalia
  • Illegal substances
  • Other controlled substances (these include medicinal marijuana, marijuana, cannabis, and hemp) and their paraphernalia
  • Financial Institutions and lenders (these include insurance, penny auction companies, and cryptocurrency)
  • Donation-based non-profits
  • Auto dealerships

Line of Credit #6 – Divvy

For a fast business loan and an all-in-one financial management solution, check out Divvy.

For newer small businesses in particular, Divvy can offer more of a one stop shopping experience than the others we’ve already outlined. Busy and overwhelmed entrepreneurs may appreciate getting it all under one roof.

If that is sounding a lot like you, then read on.

Divvy is a somewhat different line of credit provider in that they offer a more all in one financing solution for your small business. This includes an expense reporting solution for small to moderate sized businesses.

This business financing provider offers a flexible business line of credit and they serve it as, essentially, a business credit card. This is more helpful than just a business line of credit in that you can build business credit with their arrangement.

Their credit card will tie in directly with your existing business expense management software. You can get a credit card for each employee who needs one, and can track company spend in real time and set up budgets that prevent overspending. 

There are no annual fees, and you get flexible rewards. You can even get a virtual business credit card (or several).

In addition, you can even get a credit line from them for all the way up to $15 million! And because a bad credit history is not an issue, you can get a bad credit business loan, and apply for credit line increases directly from your dashboard. 

The Divvy credit card reports to the Small Business Financial Exchange. As a result, every on-time payment helps to improve your business credit score. 


You can apply for their business line of credit in seconds via their online application. Approval is fast, and you can use their credit card and software for free.

Get Your Free Business Finance Assessment to Discover your Optimal Path to Improve Fundability™, Build Business Credit, and Get Business Loans

How to Get a Business Loan With Bad Credit

Step #1 – Get the Rest of Your Financial House in Order

Lenders want assurances that you will pay them back, and a bad credit history does not provide such an assurance. But collateral, good business credit scores, and good, provable cash flow all do. 

A small business owner with a poor personal credit score should be looking for valuable collateral the business can put up. This can potentially come from equipment the small business is purchasing, or nonperishable inventory on hand.

The company should be building a business credit score (and we can help!). As for cash flow that it can readily prove, the small business will need to hire an accounting professional to get the books in order. 

And even though you’re not trying to get a personal loan, improving your personal credit will always help. A good credit history will help your business, so try to increase a low credit score.

Step #2 – Build Fundability™

Whether you want a startup business loan or your business has some mileage on it, you are going to need to assure a lender that you will pay them back. The easiest way to do so is to build Fundability™.

A Fundability Foundation™ is assuring to lenders because it’s calculated to separate personal credit, assets, and banking from commercial. And it builds in trust with a thoughtful online presence and adherence to all laws and regulations.

Good personal credit is a part of it, but you can still build your foundation and work on it even as you chip away at your bad personal credit. 

Step #3 – Shop Around for Lenders and Do Your Homework

Take note of what matters the most to you and what you truly need from a lender. Are you looking for a fast funding solution? Or can you take your time? Do you need several years to pay? 

If you’re not sure that you can pay on time every single time, then the interest rate should loom particularly large. And be honest with yourself about your prospects for approval. This is the time to get financing, not shoot for the moon.

Other issues you should take into consideration include how much you can get and whether you will need to put up collateral or offer a personal guarantee. Find out if there are restrictions on the use of the funding, too.

Step #4 – Choose a Provider and Apply

Often, a professional business plan will help you, and a well-written application will, too. If an application calls for your business tax returns, then it will help your cause if the returns were prepared correctly by an accounting professional.

Get Your Free Business Finance Assessment to Discover your Optimal Path to Improve Fundability™, Build Business Credit, and Get Business Loans

How to Choose the Best Option From All Available Choices

Consider several variables when choosing the best financing option.

Speed to Funding

If you want financing for an opportunity that’s going fast, you’ll be under different time pressures than if you can take your time to get a funding option. 

Loan Amount You Can Get

An entrepreneur who does not want or need a lot of money will always have better luck than one who needs a lot. While you can cobble together a few separate forms of financing, it means filling out more than one application. 

A busy entrepreneur may not have the time to pursue several funding options.

Qualification Requirements

Beyond whether you can qualify at all, find out if you need to provide collateral. Will you need to provide a personal guarantee? How much of an issue will it be if there is a hard pull on your personal credit?

Interest and Fees

Beyond interest, what other sorts of fees will you have to pay? Points? Maintenance fees? Anything else?

Length of the Payback Term

How long can you have to pay back the loan or credit line? Are you comfortable with paying a lot of compounded interest? Will you have to pay a penalty if you pay the loan off sooner than expected?

Restrictions on Usage of the Funds

Some lines of credit or business loans come with restrictions on usage, so check the fine print!

Future Financing Opportunities with the Provider

Finally, any good experience with a financial institution can potentially lead to another one in the future. The lending provider isn’t the only one who can have a good experience.

So can you. Do you like the service, the software, the people? If you do, see if you can do it all over again.

Get Your Free Business Finance Assessment to Discover your Optimal Path to Improve Fundability™, Build Business Credit, and Get Business Loans


Having poor personal credit when you apply for a business loan or line of credit makes for an uphill battle. You can succeed, but you will have to give something up, and an SBA loan (for example) may not be within reach at all.

Why not contact us today, to learn more about how we can help you get financing, and improve your application so your chances are better?


Can I Get a Business Loan with Bad Credit?

Recognize that one of these is not necessarily going to be the best business loan.

Even alternative lenders want to know that they won’t have to write off your loan for nonpayment. If you cannot reassure them with good personal credit, then you will have to do so in some other fashion.

How? Usually, this is by paying higher interest, settling for a shorter repayment term, or offering collateral.

Is it Difficult to Get a Business Line of Credit?

Bad credit is not an insurmountable obstacle, but it should be of concern. Another potential issue with getting a business line of credit is how long your company has been up and running. Yet another is the state of your business credit.

Lenders will also have concerns if your business has irregular cash flow, or if you don’t have good records which can prove the health of your business’s cash flow.

Can a Startup Get a Business Loan with Bad Credit?

It’s not impossible. But recognize that a lender wants an assurance that they will be paid back. A startup, by definition, doesn’t have a long time in business with proven revenues (although they could have rather good annual revenue for their limited time in business). 

And if the small business owner has poor credit, that’s another area where a lender will need assurances. Fortunately, there are a few ways to assure lenders, including working with a credit partner, providing collateral, and offering up a personal guarantee.

About the author 

Janet Gershen-Siegel

Janet Gershen-Siegel is the seasoned Finance Writer and a former content manager at Credit Suite. She has been admitted to practice law for over 30 years, with a focus on litigation and product liability, and is a published author, with writing credits at Entrepreneur, FedSmith.com and BusinessingMag.com.

She has a BA in Philosophy from Boston University, a JD from the Delaware Law School of Widener University, and a MS in Interactive Media (Social Media) from Quinnipiac University.

She regularly writes for Credit Suite, which helps businesses improve Fundability™, build credit, and get approved for loans and credit lines.

Her specialties: business credit, business credit cards, business funding, crowdfunding, and law

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