Grow Your Business Even With a Bad Credit Score

Your credit score can feel like the most important factor when it comes to securing finances. As a small business owner, you may be frustrated as you search for financing that doesn’t require a high score. Don’t let this number hold your business back, but enjoy the working capital you need to purchase assets, make payroll and grow your business.

There are many reasons your credit rating may be less than ideal. Other loans, bankruptcy, missed payments or simply a lack of available credit can all negatively affect your score. There are many ways to increase your rating, such as increasing your available credit and making timely payments, but this can be a time-consuming process. Instead, compare these financing options to find competitive funding options that have little or no credit requirements.

Asset-Based Lending

Your assets are a key source of working capital and investment funds. Leverage your real estate, equipment or other costly assets to secure your loan. When you secure financing with a real asset, many lenders will waive or lower credit requirements. This allows you to gain quick approval for a loan.

Because the loan is tied to an asset, you can often use it as cash. Invest your loan in payroll, new hires, new inventory or simply to pay off other debts to increase your credit rating. Compare asset-based financing options to find the best terms, rates and other features.

Equipment Financing

Similar to asset-based lending, equipment financing has a low credit rating threshold due to the value of the asset. Instead of receiving cash for an asset you already own, equipment financing allows you to purchase a new asset using your purchased equipment as collateral. Many equipment financing options don’t require a down payment and have competitive rates.

Of course, backing a loan using essential business equipment can come with additional risks. If you aren’t able to continue making payments you must give up your equipment. Look for options that offer flexible payment options to be sure a sudden downturn in business doesn’t put your equipment at risk.


Microloans are distributed by financial institutions, investors and the Small Business Administration. A microloan is an excellent option to receive a small amount of financing to cover a short season of intense growth or an unexpected emergency. This type of financing may require a certain credit score, but many are more generous than traditional bank loans and offer options to businesses with low credit ratings.

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