Though some entrepreneurs still go to banks for loans, an increasing number are finding it easier to get the funding they need online. One big benefit of borrowing online is that many platforms work with newer businesses and lower credit scores than a traditional bank would — so a weak credit history doesn’t automatically shut the door.

This article explores five funding providers that are friendlier to entrepreneurs with bad or limited credit, so you can get your business off the ground.

Why Consider a Bad-Credit-Friendly Funding Option?

Funding options with flexible credit requirements can be a lifeline for entrepreneurs who are still establishing a credit history, or who have bad credit. If you’re in either category, getting approved for a traditional small business loan can be incredibly difficult.

That’s where these lenders come in. Many are designed to provide financing to small businesses that don’t yet have access to traditional sources of capital — often by looking at your sales, revenue, or invoices rather than your credit score alone.

1. PayPal Working Capital

PayPal Working Capital is a financing program from the online payment giant. Instead of a credit check, eligibility and your advance amount are based primarily on your PayPal sales history — making it accessible to businesses with less-than-perfect credit. It’s best suited to established PayPal merchants rather than brand-new startups.

• Typical range: from around $1,000 up to $150,000 (more for repeat borrowers)
• Speed: funds often available within one business day
• Repayment: a share of your daily PayPal sales
• No prepayment penalty and no collateral required
• Eligibility based on PayPal sales, not a credit check

General requirements: a PayPal Business or Premier account held for about 90 days, a minimum amount of annual PayPal sales (this threshold varies by account type), and any existing PayPal Working Capital loan paid off. Confirm current thresholds on PayPal’s site.

2. Square Loans

Square Loans (through the payment processor Square) offers financing based on your Square payment processing history rather than a traditional credit check. Like PayPal, it’s best for businesses already using Square to process sales, and approval leans on your sales volume.

• Typical range: from a few hundred dollars up to around $250,000
• Speed: funds often available within one business day
• Repayment: an automatic percentage of your daily Square sales
• No collateral required
• Eligibility based on Square sales history, no minimum credit score stated

General requirements: an active Square account processing payments, with a consistent sales history improving your odds of an offer. Confirm current terms on Square’s site.

3. Fundbox

Fundbox is an online platform offering business lines of credit with a fast, simple application. It’s known for working with businesses that have lower credit scores, weighing your business’s revenue and activity heavily in the decision.

• Typical range: lines of credit up to around $150,000
• Speed: funds often available as soon as the next business day
• Repayment: short-term, typically over 12 or 24 weeks
• No prepayment penalty and no collateral required

General requirements: Fundbox typically looks for a business that has been operating for at least a few months and meets a minimum annual revenue. Note this makes it better for businesses with some operating history than for a day-one startup. Confirm current requirements and rates on Fundbox’s site.

4. Kiva

Kiva is a nonprofit crowdfunding platform offering 0% interest microloans to entrepreneurs in the United States. Rather than a credit check, Kiva uses “social underwriting” — you get some friends and family to lend first, which then unlocks the wider Kiva community of lenders. It’s ideal for entrepreneurs who need modest startup capital and can rally a small initial network.

• Typical range: up to around $15,000
• Interest: 0% (this is a genuinely no-interest microloan)
• Repayment: flexible terms, commonly up to 36 months
• No collateral required
• No credit-score minimum — approval is community-based

General requirements: you’ll go through a brief application, a private-fundraising period among people you know, and agree to Kiva’s terms. Confirm the current process on Kiva’s site.

5. Accion Opportunity Fund

Accion Opportunity Fund is a nonprofit lender focused on supporting small business owners — including many who are underserved by traditional banks. It considers more than just your credit score, looking at the whole picture of your business, and offers coaching and resources alongside financing.

• Typical range: from around $5,000 up to $100,000 or more
• No collateral required for many loans
• Considers your full business picture, not just credit score
• Added support: business coaching and educational resources

General requirements: typically a U.S.-based business and a viable business plan. A minimum credit score may still apply for some products, so confirm current criteria on Accion’s site.

Alternative Financing Options

Beyond those five lenders, there are other ways to finance a business when your credit is limited:

• Business credit cards: some offer 0% introductory rates and rewards that can serve as short-term financing — just have a clear payoff plan.
• Peer-to-peer lending: Prosper connects borrowers with individual investors. (Note: LendingClub, once a P2P leader, exited retail peer-to-peer lending and is now a bank, so Prosper is the main remaining option of this type.)
• Merchant cash advance: providers advance working capital in exchange for a portion of future card sales. Convenient, but often expensive — read the terms carefully.
• Crowdfunding: platforms like Kickstarter and Indiegogo let you raise funds from the public, often in exchange for rewards or early product access.
• Invoice financing: providers advance funds against your outstanding invoices, giving you cash flow without a traditional credit check.
• Friends and family: one of the oldest funding methods — just put clear terms in writing to protect the relationship.
• Angel investors and equity platforms: networks like AngelList and similar platforms connect businesses with investors, though these usually involve giving up equity.

Because financing is such an essential part of starting a business, be extra careful with the terms and conditions of any agreement. Read every detail before signing, and watch out for scams or predatory lenders — especially any that “guarantee” approval, charge large upfront fees, or pressure you to act immediately. With some research and due diligence, you can find a financing solution that genuinely fits your business.

The Bottom Line

Bad or limited credit doesn’t have to stop you from funding your business. Plenty of lenders and alternatives weigh your sales, revenue, invoices, or community support rather than your credit score alone. Weigh your options carefully, compare the real costs, and confirm current terms directly with each provider before you commit. With the right approach, you can find the financing that helps you launch and grow.