Getting a Small Business Loan For Bad Credit With No Paperwork

Need a Small business Loan with Bad Credit?

An entrepreneur is a dreamer. He starts a small business venture as the first step towards realizing his dreams. He works hard to ensure that all aspects of his business are in sync with his ideas and resonate with the customers. And he gets through the initial phase of settling in on the back of his relentless efforts and soon reaches a place that is not unfamiliar to many.

He starts looking at the options available to him and shoots out a few applications. The lenders are skeptical offering loans for small business owners. But that is not his only concern. Somewhere during the course of his business, he has missed a couple of installments and has a bad credit score. He faces rejection from most lenders and is faced with question that will decide the future of his business – How does one get a small business loan for bad credit?

Business quote:

Small business isn’t for the faint of heart. It is for the brave, the patient & the persistent. It is for the over comer. – Anonymous

The predicament of this entrepreneur is not uncommon. If you have found yourself in a similar situation, then the next ____ minutes might just offer you a light at the end of the seemingly dark tunnel. Before asking how or where, let’s look at whether a ‘small business loan bad credit’ is offered by anyone or not? This brings us to the question:

Bad Credit Business Loans Eligibility Requirement:
  • Min 6 months in business
  • Connect any one business accounts and bank checking account for online verification process.

Business loans for bad credit guaranteed, if  you meet the above requirements. One must have business accounts for verification purpose. Find if you can pay back the business loan with agreed term and rates. If you fail to do so, you will fall back. Since you have bad credit this a good opportunity to expand your business and also to improve your credit score from bad to good.

How to Get business loan with bad credit?

Businesses which are active with a minimum 1 year and making business sales of over $50,000 per annual. Have a chance of getting an online small business loan for bad credit. However, not all bad credit business owners can be approved, unless they meet the lender’s minimum requirements.

  1. Apply online by filling out application form at
  2. Link your business accounts.
  3. no minimum  credit  score requirements.
  4. Kabbage will verify your business accounts in real time
  5. If approved, you get instant business loan offer.
  6. If satisfied, then receive business loan in your bank checking account or paypal within 24 hr
  7. Use Loan for your business purpose.

Important to have Bank checking account, any online accounts like PayPal or Amazon store or accounting software or other accounts can be linked directly to the kabbage for verification purpose.


Can I get a bad credit small business loan?

One word answer – YES.

Lenders, usually peg a lot of importance to the credit history of the prospective borrower. A few missed / delayed installments can land you in a spot which leaves you not many places to turn to for your business loan requirements. There are some lenders who try to accommodate such borrowers with a reduced credit rating requirement. Depending on how bad your credit is, these lenders may / may not be able to extend a small business loan to you. Let’s look at some online lender options for small business loans bad credit:

business loan eligibility

Among all the lenders, Kabbage stands out especially for borrowers looking for instant business loans bad credit. Kabbage looks at the overall performance of your business and not just your credit score to determine your eligibility for a small business loan.

So, which one do I choose for my small business loan bad credit requirement?

This is a no-brainer. Apart from looking beyond the credit scores, Kabbage offers the following features:

  • Simple application process
  • Approval within minutes – Kabbage uses technology to assess your business and provides the funding amount possible within minutes.
  • Revolving line of credit available –use the funds whenever you want and pay interest only for the amount and tenure used.
  • Zero origination fees.
  • Zero processing fees.

A lender dedicated to small businesses, Kabbage business funding options can be availed to manage different aspects of your small business.

What about the interest rates and other charges? Will I be charged high?

Unsecured small business loans can be charged between 6% and 100% interest depending on a range of parameters like credit score, years in business, and business income. Let’s compare business loans now:

compare business loans

Applying for a small business loan with bad credit through Kabbage?

The application process is simple, the approval is instant and the disbursal within a few days to your bank account or within minutes to your PayPal account. Here is the process:

  1. Visit and fill an online application form.
  2. Link your business accounts
  3. Done!

Kabbage does not require you to submit any documents. Simply fill up your details, link you accounts and you are good to go. Best no doc business loans in USA.

Small Business Loans within 24 hrs:

Post receipt of your application, Kabbage will verify your business accounts in real-time make an instant offer if your application is approved. Upon your acceptance of the terms the loan amount is credited to you within 24 hr. You have the choice of asking for the loan amount to be credited into your business checking or PayPal account. Credits to PayPal usually take a few minutes while amount deposited into your business checking account take 0-2 days to process, depending on your bank.

Remember, it is important to link your bank account, PayPal account, Amazon account (if any), online accounting software and any such accounts that can help Kabbage verify the creditworthiness of your profile. Kabbage connects directly to these accounts to review your business transactions.

online business accounts

Are there any other elements that I need to know to get Business Loans for Bad Credit?

Before approving your loan application, a lender will consider two important ratios used by banks and all financial institutions offering loans to understand your repayment capability. While Kabbage does not peg much importance to the credit score, the lenders will not offer a loan of $100,000 to a borrower without appropriate means of income. Let’s understand this with the help of an example:

Katharine, a small business woman, has been in the manufacturing business, making steel parts for various household uses. She started off a couple of years ago with limited funds but big dreams. Her products were accepted by the market with open arms and soon she had orders flowing his way. Wanting to scale-up his operations, she started looking at small business loans. Her average monthly income is around $5000 with an annual revenue of approximately $60,000. She has a bad credit score of around 550.

business loan for women with bad credit

She approaches many lenders (online and offline) for a loan of $50,000. To her surprise most of the lenders reject her application. The reason –DSCR and DTI ratio requirement not met. Most lenders won’t communicate it to you in so many words, but this is the primary reason behind rejection of a loan application despite fulfilling the minimum eligibility criteria.

What are DSCR and DTI ratios?

By definition,

DSCR or Debt Service Coverage Ratio: A measure of the cash flow available to pay existing debt obligations.

DTI or Debt to Income Ratio: A measure of your ability to manage monthly installments to repay your loans.

To explain these better, let’s look at the example of a business woman fashion designer Katharine detailed below:

Fashion designer Katharine is looking for a loan of $50,000 for a period of 12 months. For the sake of the example, if we assume the average fee to be 5%, then the repayment schedule would look like this:

kabbage business loan interest rates

Let’s look at kabbage fee structure for a business loan for 6 month and 12 month term:

instant business line of credit approval

Now, Katharine’s average income per month is $5,000 which is calculated as follows:

  1. The Monthly cash-in for Katharine’s business = $8,000 (including sales, account receivables, etc.)
  2. Monthly cash-out = $3,000 (including rent, payroll, bills, etc.)
  3. Final Monthly business income = $5,000.
DSCR is calculated as follows:

DSCR= (Annual Business Income)/(Annual Debt Service)

In Katharine’s example:

  • Annual business income = 12 x monthly business income = 12 x $5,000 = $60,000
  • Annual Debt Service = 12 x monthly cash-out = 12 x $3,000 = $36,000


DSCR = [($60,000)/($36,000)]=1.67

Most online lenders look for a DSCR of 1.15 and above, while banks require a DSCR of at least 1.23. In Tom’s case, his DSCR is well above the minimum required. Let’s look at DTI next.

DTI is calculated as follows:

DTI=[(Recurring monthly expenses)/(Monthly income)]*100

In Katharine’s example:

  • Monthly business income = $5,000
  • Recurring monthly expenses = $3,000



This is where Katharine’s application for a loan gets rejected. Most lenders prefer a DTI of around 45-50%. Anything above it can be an area of concern.

So, what should Katharine do?

Look for ways to cut recurring costs so that the DTI ratio comes within the acceptable range and re-apply.

It is important to understand these calculations since most lenders use these ratios to assess the repayment capability of the prospective borrower. By understanding and preparing yourself for it, the chances of rejection can drastically reduce.

Can I get a small business loan with bad credit if I have high DSCR and low DTI ratio?

A bad credit score is used by most lenders to assess the creditworthiness of borrowers. A bad credit is usually a sign of a possible default. However, Kabbage breaks these norms and looks at the overall performance of your business to assess your creditworthiness. This is helpful for self-employed professionals like doctors, plumbers, etc. having tax paid history and willing to connect to business accounts like PayPal, Qbooks, checking account, etc.

A small business or a self-employed professional, usually finds it difficult to meet the eligibility requirements of banks and other online lenders when they apply for a business loan. Kabbage endeavors to help these businesses gain access to funds – hassle-free. Once you apply for a business loan through Kabbage, the bad credit aspect is taken care of. Also, the minimum annual revenue requirement is designed for people in the early stages of their business.

This eventually helps business owners cross the initial hurdle of eligibility for a loan and a good DSCR coupled with a low DTI ratio can help them get a good loan offering at low rates.

Business owners looking for small business loan bad credit face an uphill task meeting the eligibility requirements. Kabbage is indeed a blessing for them. So, if you are looking to expand your business and struggling with getting a small business loan, login to and apply today!

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