So far you must be accustomed to the significance of ‘the fair credit score.’ A ‘good’ or ‘fair’ credit score can help you land a practical business loan deal. Not every small business has a stellar credit score, same as not every student in a class is a distinction holder. But does it mean you snub that student? No! Likewise, alternative lenders offer bad credit business loans for businesses with a low credit score. Although it is challenging to apply for a business loan, with some tips, you can secure a perfect deal.

Tips to lock a Bad Credit Business Loan

Other than improving your credit score, there are many other ways you can improve the chances of getting a bad credit business loan. Have a look at following tips and get an advantage:

  1. Conduct in-depth research on lender’s criteria.

When applying for a bad credit business loan, you must be extra vigilant regarding the lender’s criteria. Instead of wasting time at the doors of lenders who have ‘no bad credit score’ policy you must approach lenders who are catering to the financial needs of businesses with a low credit score. With these loans, you have access to enough money to streamline cash flow and cover daily operations. So, try the lender with the minimum credit score as a requirement.

  1. Contrive a clear and strategic business plan.

Don’t underestimate the power of the clear and strategic business plan; it has the potential to get you out of the limelight of the bad credit score. Make sure you have a convincing rationale behind applying for a loan. For example, if you need a bad credit business loan to get money to purchase equipment, you must mention the very reason.

  1. You must be ready to accept the high-interest rate!

Getting a business loan with bad credit is hard, there is no need to deny this fact. So if a lender is offering, you are business loan even with bad credit, chances are that the interest rate will be higher. Before signing the contract, you must evaluate your financial position because at the end of the day you have to make all the payments on time.

  1. Pay your outstanding debt on time – can’t emphasize on this fact!

Show your lender that you are capable enough to make all the payments on time, delay in the payment hurts your credit score. Set the monthly payments reminder, redefine your budget, and download free apps that will help you streamline all the processes.

Now that you know all the tips, it times to explore the advantages and disadvantages of the potential bad credit business loan options.

  1. Business and Merchant Cash Advance

The cash advance lender is more interested in future revenue, so a bad credit score is irrelevant to him. A business cash advance or merchant cash advance is very easy to apply for and more importantly, it is very easy to qualify for, you apply with ease.


  1. A bad credit cash advance comes with a fixed interest rate and fixed repayment terms.
  2. If you need fast access to cash, Merchant Cash Advance is what you are looking for!
  3. No fear of losing personal assets as you can get this loan without offering any collateral.


  1. A merchant cash advance is an expensive funding option – it is more expensive than a bank loan. So weigh your options carefully.
  2. Your potential lender might place some restrictions on the use of the funds.
  3. Invoice Financing

Looking for a business loan to cover the liquidity needs, invoice financing would be an ideal option. The lender will finance your business in exchange for the pending invoices. Once the customers have paid you in full, the lender will finance completely.


  1. Invoice financing offers a golden opportunity to the lender to increase the cash flow.
  2. With bank accounts full of money, you will be able to design an effective financial plan.


  1. You have to follow customers so that they make all the payments on time.
  2. As there are no monthly payments so it will be hard for you to keep track of the debt.
  3. Crowdfunding

Let us say, you applied for a bad credit business loan because you need funds to get your startup off the ground. In the initial stages, most of the startups have a poor credit score. In this case, crowdfunding is an ideal option. Here, the investors will invest in your business after assessing your startup based on your business plan, vision, and mission.


  1. You can have access to the large sum of money. Some investors turn out to be gracious and invest a large amount of money in your business.
  2. If an investor likes your business, you are on your way to building a strong relationship with the lender.
  3. Crowdfunding gives you a chance to build the repute among the customers.


  1. Either the investor likes your business, or he or she does not!
  2. The investors might want to share their insights on the major business-related decisions.
  3. Grants for bad credit business from the Government

If you want cash without the worry of the repayments, then you must apply for business grants offered by the government. The companies that offer grants pay attention to your business details so make sure you are applying for a grant with a reason.

If your reason is justified, then the loan is yours!


  1. No tension of making repayments on time.
  2. You don’t have to pay any tax on the borrowed amount.
  3. Companies that are offering grants don’t look at the bad credit.


  1. The approval and application process of the business grant is meticulous and time-consuming.
  2. As it is no convenient funding option so the competition is quite tough.
  3. There might be some restrictions on using a business grant.

Lastly, acknowledge all of these factors and pick the most practical business loan. Head over to the official website of the Merchant Advisors, and apply for a bad credit business loan. For more ideas and tips, you can follow us on Twitter (@Onlinecheck) and Facebook (@Onlinecheck). If you have any question, feel free to call us on our toll-free number at (833) 827-4412, our loyal and keen financial advisor will answer your every question and guide you throughout the way.

Small Business Financing News │ Merchant Advisors | blog
The Pros and Cons of Bad Credit Business Loans
The Pros and Cons of Bad Credit Business Loans
Looking for funding to fund your small business? The road ahead is full of twists and turns because it does require a lot of time and research to locate the best funding program that suits your business. Due to theRead more
Merchant Advisors is offering bad credit business loans at the economical rates; familiarize yourself with the advantages and disadvantages before applying.
Merchant Advisors
Merchant Advisors