3 Alternative Financing Options for Businesses with Bad Credit

That age-old saying ‘you need money to make money’ is absolutely true. Operating capital and money to pay creditors who provide your businesses with goods and services that are essential to the operating of your business and its ability to make a profit is essential. Every now and then, however, you might need a cash injection and if you don’t have an excellent credit rating or even no credit, this might prove quite challenging. It doesn’t mean you won’t have access to credit though. Have a look at our three alternative financing options for businesses with bad credit to see if your business can get the credit it needs.

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Family and Friends

Often friends and family are more than willing to support small businesses and entrepreneurs with a bit of financial help, particularly if you offer them some equity in exchange for their investments. They’re also less likely to worry about credit scores and more likely to invest in you as a person – and if they’re family or friends, they probably already like you and that means you won’t have to do too much convincing. Of course, you can’t really expect large sums of money from family and friends, but if you just need a small amount of money, you might just come right by simply asking those close to you.


Banks and financial institutions are definitely not your only option when it comes to securing a loan for your business. Microlenders or non-bank companies that specialize in offering smaller loans for short term might be just what you’re looking for. Companies like AdvancedPoint offer these loans to small businesses with less than ideal credit scores. The interest rates might be higher than with traditional financial institutions, but they can also offer flexibility on repayments that you might not get from a traditional bank. Microlenders are a solid way to get a cash injection into your business, particularly if it is already profitable. You might require a business plan or to share your financial statements with a microlender.


Perhaps a more risky and public way to get funding for your next product or idea development is by crowdfunding. It’s become a very popular way for businesses to get the working capital they need to develop ideas and products into reality. It involves offering those who financially support your end-goal discounted pricing or other perks in exchange for them making a cash injection into the business. This way, instead of borrowing a lump sum of money from a bank or financial institution, you’re accepting lots of small payments for the promise of a product or service delivered in the future. With a bit of luck and a solid plan for your cash investment, you shouldn’t have too much trouble getting the financing you need to get your business moving in the right direction again. Stepping outside the box and exploring alternative ways to fund your business shouldn’t be your backup plan. You should explore these options even when a bank loan might be available to you.