Bad-credit business loan rates in 2026 depend heavily on FICO band and collateral. 640-679: 15-25% APR on online term loans. 580-639: short-term loans at 30-50% effective APR, or equipment financing at 16-22%. Below 580: mostly merchant cash advances at 1.30-1.50 factor (40-100%+ effective APR), invoice factoring, or secured options. The biggest levers are collateral and bank-statement strength — both can move you a tier regardless of score.
A low credit score doesn't close every door — it narrows which products you qualify for and raises the price. The good news is that most bad-credit business financing is underwritten on revenue and bank statements rather than FICO alone, so a strong, consistent deposit history can offset a weak score. This page is a reference: 2026 rate ranges by FICO band, which products stay available at each tier, and the moves that lower your cost. For the evergreen guide, see business loans for bad credit; for the full rate picture, see the 2026 business loan rates hub.
2026 Bad-Credit Rates by FICO Band
| FICO Band | Likely Products | Rate / Cost (2026) |
|---|---|---|
| 640-679 | Online term loan, equipment, LOC | 15-25% APR |
| 580-639 | Short-term loan, equipment financing | Short-term 30-50% APR; equipment 16-22% |
| 500-579 | MCA, invoice factoring, secured | MCA 1.30-1.50 factor (40-100%+ APR) |
| Below 500 | Secured / collateral-backed only | Case-by-case; strong revenue required |
Ranges assume 6+ months in business and steady revenue. Confirm your tier in credit score requirements for working capital, and see equipment financing with bad credit for the collateral route.
Which Products Stay Available With Bad Credit
- Equipment financing — the asset secures the loan, so credit matters less. Often the cheapest bad-credit option at 16-22%. See equipment financing rates 2026.
- Invoice factoring — priced on your customers' credit, not yours. A fit if slow receivables are the real problem. See invoice factoring rates.
- Short-term loans — faster and looser than bank loans, at 30-50% effective APR.
- Merchant cash advance — the most accessible and the most expensive; convert the factor rate before signing. See MCA rates 2026.
What Actually Drives Your Rate
- Bank-statement strength — for bad-credit products this outweighs FICO. Deposit consistency and negative days matter most.
- Collateral — securing the loan can cut hundreds of basis points and open denied products.
- Time in business — 2+ years widens options even with a low score.
- Existing advances — stacked positions raise rate and trigger declines.
- Industry and revenue trend — growing, stable revenue earns better pricing than a declining trend at the same score.
How to Lower the Cost
- Clean up 90 days of statements before applying — steady deposits, no overdrafts.
- Offer collateral if you have equipment, receivables, or real estate.
- Right-size the product — don't fund a long-term need with a short-term advance.
- Avoid stacking — one facility, repaid cleanly, builds the track record that earns a refinance.
- Refinance after 6-12 clean months into a cheaper product as your score and history improve. See how to get out of bad business debt.
Next Step
Get matched with lenders that underwrite on revenue, not just credit — and see every option you qualify for in one application. Get matched with lenders.