How to Get a Business Loan With Bad Credit and No Collateral
Getting a business loan is hard enough. Getting a business loan with bad credit and no collateral can feel impossible.
Banks tell you no.
Traditional lenders want tax returns, collateral, and perfect scores.
Meanwhile, you still need money for inventory, payroll, marketing, or just to keep the doors open.
The good news is this:
You can still get funded, even with bad credit and no collateral. You just have to understand how lenders think and what types of loans still work for you.
In this guide, we’ll break things down in simple, clear steps so you know what to do next.
Why Banks Say No to Bad Credit and No Collateral
First, let’s be real about why the bank shut you down.
Traditional banks usually want:
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Strong credit scores
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Collateral (real estate, equipment, etc.)
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Clean bank statements
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Solid tax returns and financials
If you have:
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Credit scores in the 500s or low 600s
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No business or personal assets to pledge
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Some late payments, collections, or maxed-out cards
…then a bank will often decline you fast. They see you as high risk.
However, not all lenders work like banks. Some lenders are more focused on:
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Your current business revenue
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Your daily or monthly deposits
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How long you’ve been in business
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Your industry and cash flow pattern
This is where alternative funding and unsecured business loans come in.
Step 1: Know What You Still Have Going for You
Even with bad credit and no collateral, you may have strengths. These can help you qualify.
Lenders may care about:
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Monthly business revenue
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Many programs want to see at least $10,000–$15,000 per month in deposits.
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Time in business
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Being in business 6–12 months or more helps a lot.
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Consistent deposits
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Regular income shows that money is coming in, even if your credit is weak.
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So ask yourself:
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Does my business bring in steady revenue every month?
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Have I been operating for at least six months or more?
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Are my bank statements showing real activity?
If the answer is yes to some of these, you still have options.
Step 2: Focus on Revenue-Based and Unsecured Options
When you have no collateral and bad credit, you usually need to look at revenue-based or unsecured funding instead of traditional loans.
Here are some real options that may work.
1. Revenue-Based Business Loans
These loans look at your monthly income, not just your credit score.
Basic idea:
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Lender reviews your bank statements.
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They may approve you for a loan based on a percentage of your monthly deposits.
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Payments can be daily, weekly, or monthly, depending on the program.
Yes, rates may be higher than a bank. However, you are getting access to money you would not get from a bank at all.
2. No-Doc or Low-Doc Business Loans
A no-doc or low-doc loan is designed for business owners who:
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Don’t have clean tax returns
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Don’t want to submit piles of paperwork
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Need a faster decision
These programs often use:
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Better credit scores
Instead of:
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Tax returns
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Profit-and-loss statements
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Collateral appraisals
3. Merchant Cash Advance (MCA)
A merchant cash advance is funding based on your future sales.
The lender gives you money up front. In return, they take:
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A daily or weekly debit from your bank account, or
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A percentage of your credit card sales
MCAs are easy to get approved for with bad credit.
If you already have MCAs that are choking your account, you may need an MCA buyout or consolidation, not another advance.
Step 3: Clean Up What You Can (Without Waiting Years)
You don’t need perfect credit to move forward. Still, small improvements can help.
Here are simple moves you can make in the short term:
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Pay down small, maxed-out credit cards a little
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Even bringing utilization down can bump your score.
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Avoid new late payments
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Make sure current bills are paid on time, even if only minimums.
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Stop applying everywhere
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Too many credit pulls can make things worse.
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If you have too many inquiries, it will hurt your chances of getting funding. Please see our inquiry removal page if you need help with that.
Step 4: Prepare the Basic Documents Lenders Will Want
Even without collateral, lenders need to see that your business is real and active.
Usually, be ready with:
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Last 3–6 months of business bank statements
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Driver’s license
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Voided business check
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Basic business information (EIN, address, industry, time in business)
Some no-doc or low-doc programs won’t ask for tax returns at all. That’s why these programs exist — to help business owners who don’t “look good on paper” but are actually making money.
Step 5: Work With Lenders Who Specialize in Bad Credit and No Collateral
This part is key.
If you go to the wrong place, you’ll just hear “no” over and over again.
You need lenders who specialize in:
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No-doc and low-doc loans
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Unsecured business funding
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MCA buyout and consolidation if you’re already in high-cost debt
At UnsecuredFinances.com, for example, we focus on:
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Business owners who have revenue, but:
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Bad credit
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No collateral
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Messy tax returns
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Startup loans and newer businesses
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MCA relief and buyouts when cash flow is tight
The idea is simple:
If the business is real and bringing in money, you deserve a fair shot at funding.
Step 6: Be Honest About What You Can Afford
Bad credit and no collateral often means:
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Higher rates
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Shorter terms
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Faster payments
So you have to be honest about cash flow. Ask yourself:
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What payment can I really handle each day or month?
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How will this loan help me bring in more revenue?
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Is this funding going toward growth or just survival?
The right loan should:
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Help you stabilize or grow, not slowly drown you
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Give you breathing room, not more panic
Sometimes the best move is to consolidate or buy out expensive short-term debt and replace it with something more manageable.
Final Thoughts: Yes, You Still Have Options
Having bad credit and no collateral doesn’t mean you are done. It means you need to:
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Stop chasing bank-style loans that you’re not going to get
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Start focusing on revenue-based and no-doc options
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Work with people who understand your situation and your industry
You are not the only business owner in this position. Many successful companies started exactly where you are now.
If you’re ready to see what you qualify for, even with bad credit and no collateral, you can reach out for help instead of guessing.
👉 Next step:
Visit UnsecuredFinances.com to explore unsecured and no-doc business loan options. You can apply in a few minutes and see what you qualify for, without needing perfect credit or property to pledge.
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