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Best Small Business Loans For Women With Bad Credit – 500+

Being a woman owner of small business can be difficult, especially if you have bad credit. Although as a woman you’re a part of a minority in the business ownership world, this shouldn’t affect your ability to find loans and business financing. In fact, registering as a woman-owned business in your city or region can help you secure access to loans and grants that are specific to women.

However, it can still be quite difficult to find the right loan for your business if you have bad credit or negative remarks on your credit report. This doesn’t mean that you should settle for financing with an exorbitantly high APR. With a variety of online lenders and financing options at your fingertips, finding affordable funding can still be a realistic goal.

What Is Considered “Bad Credit”?

Having bad credit is defined by FICO, as having a score between 300 and 629. As many online and traditional lenders require a score above 640 to be considered for a loan, having bad credit can make finding affordable financing seem like a daunting task for any business owner.

How To Get A Small Business Loan For Women With Bad Credit

You might be wondering what you need to do before applying for a small business loan. The first thing that you should do is have all of the documents pertaining to your personal and business financial history available before starting the application process.

You should also take a look at your credit report and make sure that all of the remarks are accurate; if one of them seems incorrect, it could be worth taking the time to dispute it because even a small boost to your credit score can increase your chances of being approved for a lower rate.

You should also evaluate the amount that you are looking for, as well as the purpose of the loan, and draw up a sound business plan to pitch to potential lenders. Even if you have a low credit score, lenders who take a holistic approach to the application evaluation process may weigh a pitch as heavily as your annual revenue and financial history.

Once you have figured out how much and which type of funding you’d like to go for, start applying to lenders who you think you’ll qualify with. Make sure to evaluate at least a few offers before making a final decision.  

What If You Have No Credit?

Being a woman business owner with no credit can be difficult. As many lenders have both a minimum time in business and minimum credit history requirement, not having any credit takes some traditional options off the table. However, many online lenders will also take your annual revenue, statement of purpose and other factors into account when evaluating your application. In addition to looking into lenders that don’t have a minimum credit score requirement, you should also consider less credit-based options like grants, crowdfunding and invoice factoring.

Non-Credit Considerations for Lenders

Revenue

If you have a high enough annual revenue, it may be possible to secure a large amount of funding at a low rate, despite having a bad credit score.  

Profitability

Another factor, similar to annual revenue, is your business’ profitability. Profitability takes your annual revenue and compares that with your regular expenses, to see how much your business actually makes after all of the bills are paid.

Time in Business

The amount of time that you’ve been in business can have a huge impact on your ability to get approved. Even with average or poor credit, if you can prove a consistent track record of more than a few years for your business, lenders might be more willing to work with you or offer a lower rate.

Outstanding Debts

The amount of outstanding debt that you have helps a lender determine how likely you are to repay a loan in a timely matter. If you have a lot of outstanding debt, it might be an indication that you have trouble repaying your loans. However, if you have successfully repaid loans in the past and don’t have much at the moment, it can tell a lender that you’re a reliable borrower and are likely to pay the debt back.

Best Small Business Loan Options For Women With Bad Credit

For Poor or No Credit

Fundbox – No Minimum Credit Score

Invoice Financing and Lines of Credit: Between $1,000 and $100,000. This lender’s invoice financing rates start at 10.1%, with a maximum rate of 78.6%, depending on your financial qualifications as well as the repayment term that you select. This lender focuses primarily on your annual revenue and time in business when evaluating your application for funding.

Pros:

  • Easy, online application
  • Potential for rates as low as 10.1% with their invoice financing product and 11.4% for lines of credit
  • Access to 100% of the value of unpaid invoices
  • Next-day funding

Cons:

  • Maximum line of credit amount of $100,000
  • Potential for interest rates as high as 78.6%

» MORE: FundBox business loans for poor credit

For Average Credit

Kabbage – 560+ Credit Score For Line of Credit 

Pros:

  • Holistic application evaluation makes it easier for borrowers with average credit to get approved
  • Provides fast access to cash, with loans funding in as little as a few minutes
  • High maximum loan amount, at $250,000
  • Easy, online application

Cons:

  • Complex repayment structure
  • Short repayment periods
  • Potential for high annual percentage rates, with a maximum rate of 99%

» MORE: Kabbage business loans for line of credit options

OnDeck – 500+ Credit Score For Term Loans

Pros:

  • Low minimum credit score requirement of 500
  • Online application takes as little as ten minutes
  • Just one year in business required
  • Rewards for repeat borrowers

Cons:

  • Potential for high APR, with a maximum rate of 99%
  • Daily or weekly repayment
  • Lien and personal guarantee required
  • No benefit for early repayments

» MORE: OnDeck business loans for line of credit options

For Credit Scores Over 600

Prosper – 640+ Credit Score

Pros:

  • Access to wide variety of lenders
  • Repayment terms of up to five years
  • Potential for APR as low as 6.95%

Cons:

  • High minimum credit score requirement of 640
  • More difficult to qualify for than with other lenders
  • Late and insufficient funds fees
  • Origination fees as high as 5%

» MORE: Prosper loans for good credit

StreetShares – 540+ Credit Score For Term Loans & Line of Credit

Pros:

  • Unique, community-based approach to lending
  • No prepayment fee
  • Accessible to new businesses

Cons:

  • Can only qualify for up to 20% of annual revenue
  • Will not lend to residents of several states
  • Certain industry limitations
  • Weekly repayments

» MORE: StreetShares for fast funding and poor credit

Alternative Financing Options

LendingClub

Pros:

  • Potential for rates as low as 9.8%
  • Easy, online application
  • Funding within as little as two days

Cons:

  • Rates as high as 35.7% for borrowers with poor credit
  • UCC-1 lien requirement for loans over $100,000
  • Personal guarantee required for all loans

» MORE: LendingClub business loans  – p2p lending

Invoice Factoring Options

BlueVine – 530+ Credit Score

Pros:

  • Fast application process, with approval taking just 12 hours
  • Access to up to $5 million
  • Access to funds within just 24 hours
  • Easy for borrowers with average credit to get approved, with a minimum credit score of  530

Cons:

  • Potential for high APR, with a maximum rate of 68%
  • Late fee of 3%
  • Penalties for unpaid invoices

» MORE: BlueVine business loans for line of credit

Conclusion

Although finding business loans for women with bad credit can be difficult, it’s not an impossible task. While looking for the loan or form of financing that is right for you, make sure to submit multiple applications. Additionally, even if you have bad credit, before signing on with any lender, remember to make sure to compare multiple offers from multiple banks.

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