There are the following ways to get a Business Loan for Bad Credit:

1. Secured Business loans

Secured loans are widely known wherein the person/s when starting a new business can easily undertake any asset such as gold or property that they have as collateral to get a loan. In this case, an existing company that is taking a loan for any kind of purpose can promise any of its assets to acquire the loan. This is the best way for people or companies with bad credit to get a loan on good terms.

2. Banks 

Even though banks are unwilling to offer business loans to individuals with bad credit scores, they might be willing to do so under certain special conditions. For instance, certain banks may agree to provide the loan at a high interest rate. Furthermore, if one has a fixed deposit with a bank, one may also be able to obtain a loan up to the amount of the deposit withheld.

3. NBFCs with a focus on business loans

For an unsecured loan, it is usually offered to individuals by certain banks and NBFCs without any collateral. While it could be an obstacle to accruing an unsecured business loan for people with bad credit, it is still possible with an increased interest rate. Most banks reject their bad credit business loan application as they can’t see their creditworthiness beyond their credit score and credit report.

Non-Banking Financial Companies (NBFCs) generally check a person’s financial sound by collecting data and technology to accept a loan. Such organizations are considered flexible with credit scores and credit ratings. Nevertheless, the interest rate may be high, and a person might obtain an unsecured business loan based on their business plan proposal.

4. Overdraft Facility from your Bank

A lender authorizes credit limit in an overdraft loan. To the total sanctioned limit, the interest rate is calculated only on the utilized amount. For instance, a borrower has a good relationship with the bank and manages a current or savings account with the same bank. They can avail of bad checks and use them for business-related purposes. Banks generally do not check CIBIL scores before sanctioning a credit limit.

5. Web-based lenders

In the past, a person might have failed to pay their credit card bills or loans which would have affected their credit score. This does not mean you become ineligible to get a loan. Web-based individuals who require urgent funds with bad credit ratings. The analysis of creditworthiness differs from the traditional banking system and the process is quicker and loans are approved and disbursed without any delay.

6. Request your current lender

Another way of getting an unsecured business loan is to approach your local bank where you have an existing loan or credit card. Explaining to the bank manager about their situation, past mistakes, and current business operations to request an unsecured business loan with low interest. This method can get a person to accrue a business loan without much strain provided they display a rising repaying ability during the negotiation.

7. Business credit card

Business credit cards can also be used to receive a line of credit. Depending on the past payment of a person, the credit eligibility may vary. Although acquiring a business credit card might seem easier than securing a loan, it’s vital to know that the interest rates associated with such cards are commonly very high.

8. Revenue-based Loan

In this option, the business receives funds in full upfront and agrees to repay the loan based on a percentage of the future monthly revenue. Until the principal and interest are fully paid, the repayment continues. To receive a revenue-based loan with, a high credit score, the company must make above Rs 100,000 in sales in a year. Moreover, the loan amount cannot exceed 10% of the company’s revenue.

9. Microloan

 Microloan is designed to provide a small loan for slowly emerging small businesses and promising startups. It is offered by multiple nonprofit organizations(NGOs) profoundly called microlenders. This loan typically has repayment terms of up to 7 years with pleasing interest rates compared to those available through various online lenders.

10. Peer-To-Peer Lending

 A low CIBIL score can impact why you cannot get good business loans. You can try getting a loan from peer-to-peer lending (P2P). Nevertheless, charged a quite high rate of interest for the loan.