Loan types
Business financing with bad credit, priced honestly by band
A low score narrows the menu and raises the price. It rarely ends the conversation. Here is what $50,000 costs at four credit bands, and what actually moves the number.
Bad credit is not a loan product. It is a constraint that removes the cheapest options from your menu and raises the price of what is left. All credit profiles are accepted somewhere in this market. The honest questions are which products stay open at your score, what the premium actually costs in dollars, and what you can change in ninety days.
Here is the thing most owners with a damaged score do not know. For a large part of this market, your personal score is not the primary input. Revenue based products underwrite your business bank statements. Equipment products underwrite the machine. Factoring underwrites your customers. In all three cases a low score raises your price without closing the door, because something other than your credit history is carrying the risk.
What is actually open at each band
| Band | Realistically open | Closed for now |
|---|---|---|
| 680 and up | Bank and SBA loans, bank lines, best tier equipment pricing | Nothing meaningful |
| 640 to 679 | Online term loans, online lines, equipment, factoring, short term | Bank paper, most SBA lenders |
| 600 to 639 | Short term loans, equipment with a down payment, factoring, cash-out | Bank lines, conventional term loans |
| 550 to 599 | Advances, short term loans, factoring, equipment cash-out | Nearly everything with a monthly payment |
| Under 550 | Factoring, equipment secured deals, top of the advance range | Anything underwritten primarily on credit |
Read the right hand column carefully. Nothing on the open side is unavailable to you. The cost is what changes, and it changes fast. Below 600 you are generally choosing among products where the money comes back weekly or daily, which is a cash flow decision as much as a cost decision.
It also helps to know that underwriters do not all read the same score the same way. A 590 caused by one medical collection and thin history is treated very differently from a 590 caused by three charged off business accounts and a judgment. Two owners with identical numbers can get quotes twenty points apart on that basis alone, which is why the explanation belongs in the file at submission rather than in a phone call after a decline.
What the credit penalty costs on $50,000
Numbers make this concrete. Take one business borrowing $50,000 for roughly a year, and change only the owner's credit.
With strong credit, a twelve month term loan around 15 percent costs $4,155. At a mid 600s file, an online term loan near 30 percent costs $8,492. At a mid 500s file, a short term loan at a 1.28 factor over nine months costs $14,000. At the bottom, a merchant cash advance at a 1.40 factor over eight months costs $20,000 and collects about $417 every business day.
That is roughly a five times spread on identical money for identical use. It is worth saying plainly: repairing a score from 570 to 660 is one of the highest return projects available to a small business owner, and it usually takes months rather than years.
What actually stops a file, regardless of score
A number in the 500s rarely ends a deal by itself. These do, and they are worth clearing before you apply anywhere.
- An open bankruptcy. Almost nobody funds during an active case. Discharged is a different conversation, and how long ago matters more than the fact of it.
- An unpaid tax lien with no payment plan. A lien on an installment agreement with documented payments is workable at most funders. An untouched lien is not.
- A default or open judgment from another funder. This is the fastest decline in the market. Funders talk, and a defaulted position follows the file.
- A pattern of negative days and NSFs. Three or four across six months is survivable. Fifteen says the payment cannot be collected, which is a different problem from bad credit entirely. See negative days.
- Deposits that do not support the ask. No underwriter funds $250,000 against $40,000 a month of deposits at any credit score.
- A brand new bank account. If the business banking history is two months old, there is nothing to underwrite. This one only time fixes.
Notice that four of those six items sit in your bank statements rather than your credit report. That is why how lenders read your statements is the single most useful thing to understand when your score is working against you.
How to improve the offer in ninety days
You cannot rebuild a credit file in a quarter. You can change almost everything else an underwriter looks at, and in this lane those levers move the price more than the score does.
- 01Stop the negative days
Keep a buffer so the account never goes below zero. Ninety days of clean statements is worth more at most funders than fifty points of FICO.
- 02Clear or shrink open positions
Every existing daily debit reduces your new offer directly. Retiring one small position before applying often raises the amount more than anything else you can do.
- 03Put collateral on the table
Owned equipment turns a credit decision into an asset decision. See equipment cash-out and secured business loans.
- 04Use your customers instead of your credit
If you invoice solid commercial customers, factoring prices off their credit and largely ignores yours.
- 05Raise the average daily balance
Balance is the single biggest driver of offer size on statement based products. Even a small consistent buffer changes the number.
- 06Add a stronger guarantor
A partner with better credit signing alongside you can move a file into a better tier, and it is a real obligation, so treat that conversation seriously.
Do these in order and do not skip the first one. Funders in this lane can see everything in your statements, and the fastest way to lose a better offer is to apply while the account is still going negative twice a month. Ninety days of discipline is not a delay, it is the cheapest financing decision on the list, because it moves you out of the top of the pricing range on every product above.
Borrow only where the math actually works
At the pricing available in this lane, the discipline matters more than it does anywhere else. Money at a 1.40 factor is fine when it buys something that returns more than 40 percent inside eight months, and it is ruinous when it covers a shortfall that will still be there when the payments start.
The test is one sentence. Name the specific event that repays this and the month it happens. A signed contract, a completed job, a season that always comes. If you cannot name it, the honest answer is that the business needs a change in operations rather than capital, and adding a daily debit will shorten the runway rather than extend it. See when not to borrow.
What Exp Capital does with this
Exp Capital Solutions is a broker, not a lender. We do not approve files, set factor rates, or pull anyone's score to decide their fate. What we do in this lane specifically is stop you from shotgunning applications across the internet, which stacks hard inquiries and puts your file in front of the same funders three times with three different stories. We package it once, send it where it actually fits, and show you the offers with the total payback in dollars. When the right advice is to wait ninety days, clean the statements, and come back for money that costs a third as much, we will tell you that, even though it means we get paid later or not at all.