A lot of entrepreneurs think a good credit score is the ultimate key to getting funding. But let’s be real—it’s not the only thing that matters anymore. If your credit history’s a little rough, that doesn’t mean you’re out of options. These days, lenders are more interested in how your business is doing right now and where it’s headed. They look beyond your credit score. Instead, they care about your cash flow, your assets, and what you can put up as collateral.
So, if you’re wondering how to get business funding with bad credit, it really comes down to knowing which lenders to talk to and which options actually look at your business as it stands today. If you can show steady sales, own valuable equipment, or have reliable assets, you’re already halfway there. Get your paperwork together—be upfront about where you stand—and you can still get money for things like expanding your business, buying new equipment, or just plugging gaps in your cash flow.
Forget the old way of thinking that says a bad credit score shuts every door. Big banks? Sure, they care a lot about risk and credit, so they’ll probably turn you down if your score isn’t great. But alternative lenders and FinTechs? They play by different rules. They look at real-world numbers that show how your business is actually performing.
Here’s what they focus on:
Steady Revenue: They want to see regular deposits and sales, usually over the past 3 to 12 months. This shows you can keep up with payments.
Having equipment, inventory, or property provides a solid financial foundation. These tangible resources serve as security and demonstrate the underlying strength of your business.
Time in Business: If you’ve kept your business going for two years or more, that proves you know how to survive—even if your credit’s not perfect.
Now, let’s talk about the top three funding options that don’t put your credit score front and center:
1. Merchant Cash Advances (MCAs)
These provide quick and straightforward access to capital. Instead of traditional financing, you receive a lump sum upfront in exchange for a percentage of your future credit card sales.
Upside: You can get approved fast—sometimes within a day. Your daily sales matter more than your credit score.
Downside: They’re expensive. The costs add up fast, so only use them for emergencies or when you know you’ll make a big profit quickly.
2. Invoice Factoring
Got slow-paying customers? Factoring lets you sell those unpaid invoices to a factoring company, who gives you up to 90% of their value right away.
Upside: Instant cash, and the lender cares more about your customers’ ability to pay than your own credit.
Downside: You’ll pay a fee for the service, and you lose some control over how debts get collected.
3. Equipment Financing
Need new machinery or vehicles? The equipment you’re buying becomes the collateral.
Upside: Because the financing is secured by the equipment itself, credit history requirements are often much more flexible.
Downside: The money can only go toward the specific equipment listed in your agreement. No flexibility there.
How to Boost Your Chances
Want to stack the odds in your favor? Here’s what helps:
Be Honest: Explain your credit problems and show exactly how you’re getting your finances back on track.
Show Your Cash Flow: Give lenders updated bank statements and projections. Prove you can handle the payments.
Start Small: Utilize a smaller, short-term financing option and complete the payments on schedule. This helps rebuild trust and opens the door to larger, more favorable opportunities down the road.
By leveraging your business's unique strengths to select the right funding, you can bypass credit score hurdles and secure the capital needed to scale.
