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If you want to start or grow a small business, then you need to prepare for the challenges that you will likely face along the way. But before you can make any progress, you will need a way to fund your idea so that you can move in the right direction. People often turn to standard banks when they need to get a business loan, but if you have a bad credit score, then that path might not be an option.

The good news is that you can find other ways to borrow the money that you need to launch or expand your small business. You are about to discover several options from which you can choose, but the path you select will depend on your needs and situation.


When your goal is to borrow money in spite of having bad credit, you should consider seeking a microloan from the Small Business Administration. If you opt for this method, you can get a loan for up to $50,000. However, microloans are not always enough for business owners to reach their goals, but if you don’t need to borrow a significant amount, then a microloan could be a good fit.

Credit Card

No matter your credit score, you will almost always find a lender who is willing to give you a credit card, which you can use to cover your operational expenses. Before you decide on a credit card, take some time to compare different incentives and interest rates so that you can get the best deal possible. Some people believe that credit cards are the only type of funding that they will ever need, but this false belief will cost you a lot of money.

Most credit cards come with high interest rates, especially if your credit rating is less than perfect. Rather than looking at it as a permanent solution, you should only use a credit card when you desperately need funding. If you manage your budget and make your payments on time, your credit card can help you to improve your rating.

Personal Loans

Personal loans are perfect for those who want to get funding with negative marks on their credit reports, and overlooking this option would be a mistake. In most cases, a lender will require you to have a credit rating of at least 600 before considering your application.

But if you are willing to do a little research, you should have no problem locating a finance company that will accept a credit score of 500. Before you get a small business loan, look at the interest rate, but you can always expect to pay much more when you don’t have good credit.


Crowdfunding is a great way to get money to fund a business venture, and you won’t even need to pay it back. Rather than expecting repayment, those who invest in your business as part of a crowdfunding campaign will want a reward.

With crowdfunding, you won’t need to pass a credit check, and your success will depend on the level of interest that your idea generates. The only downside to this option is that other people might try to steal your idea, but you can take steps to protect yourself. Always get a copyright or patent on your idea before you decide to pursue crowdfunding, and you won’t need to encounter any problems.

Friends and Family

When everything else fails, you can seek support from your friends and family, but this is a risky move, and you will need to consider whether or not it’s worth it. If your business idea does not turn out as well as you hope, you won’t be able to repay your friends and family, which can cause a conflict. Not being able to offer a return on their investment can damage your relationships, but you can take measures to reduce the possible harm.

To avoid unneeded resentment, be completely honest about your business plan, letting your loved ones know that you might not be able to pay them back. If they are comfortable with the idea and the risks that are involved, you can move forward.

Final Thoughts

Although it won’t always be easy, anyone can find a way to fund a small business by refusing to surrender. You should learn to embrace the struggle because you will encounter many more roadblocks and setbacks in the business world. Not everything will go as you had planned, and the ability to remain persistent in the face of seemingly insurmountable odds is what separates those who succeed from those who don’t.