Best Short-Term Business Loans for Bad Credit

With bad credit, the best short-term funding options decide based on your sales and deposits, not your score. Our recommended funder is Merchant Fund Express, which works with credit from FICO 500 and often decides in 2 to 4 hours. If you sell through Square, PayPal or Shopify, their financing programs review your sales history on their platform and, according to their sites, don't depend on your personal score. If you can wait, a CDFI or a microloan usually costs less.

Below is the ranking, how each option is repaid, and the rules that keep a short loan from turning into a long problem. To see all short-term options without the credit filter, check the best short-term business loans.

The best short-term options for bad credit, in order

1. Merchant Fund Express (recommended funder). Built for the most common case: a business that sells well but has a bruised score. It works with credit from FICO 500 and reviews your sales and deposits; better credit and stronger cash flow usually bring better offers. Amounts from $5,000 to $5,000,000, decisions often in 2 to 4 hours and no collateral in most cases. Applying is free with no impact to your credit.

2. Square Loans. Square reviews your payment processing activity and, if you qualify, invites you with an offer in your Dashboard. Offers range from $100 to $500,000. You repay with a fixed percentage of your daily card sales, with minimum payments. Per its site, applying doesn't affect your credit and no collateral is required up to $100,000 (checked October 2026). If you don't see an offer, you can't request one.

3. PayPal Working Capital. $1,000 to $250,000 (up to $400,000 for returning customers). It requires a Business or Premier account open 90 days or more, with at least $15,000 in annual PayPal sales on a Business account ($20,000 on Premier). Per its site, your maximum offer is based on your PayPal history instead of a personal credit check. You repay with a percentage of each sale, with a minimum every 90 days.

4. Shopify Capital. For stores that have sold on Shopify for at least 90 days. Per its site, there's no credit check and no impact to your personal score, and it notifies you by email or in your admin if you're eligible. You repay with a percentage of your store's daily sales, only on days you sell.

5. CDFI or microloan. Not fast, but many CDFIs and microlenders read your credit in context and usually cost less. SBA microloans go up to $50,000 with terms up to seven years; the SBA says rates usually run between 8% and 13%.

How we picked

We ranked on criteria you can check: speed, minimum time in business, minimum credit, acceptance of an ITIN or owners without an SSN, documents, amounts and collateral. On this page, credit weighs most: we only included options that publish that they don't depend on a high score. We don't give ratings or use made-up statistics, and each company's details come from its official site, checked in October 2026. The full method is in how we rank business funding options.

We left out options that require 625 or 680 at minimum, because they aren't realistic for someone with a score in the 500s. If your credit is already above 625, also see the best bad credit business loans, where we compare more options.

Comparison table

Why bad credit doesn't always close the door

A bank looks at your score because it lends over several years and wants to know how you paid in the past. Short-term funding is repaid in months, so many funders focus more on what's happening now: how much hits your account each week, whether you have negative-balance days and how much debt you already carry.

That opens a door, but it comes at a price. When a funder takes on more risk, the cost is usually higher than a bank's. That's why short-term funding with bad credit makes sense when the money has a clear, fast job:

• Buying inventory you already know will sell in the next few weeks.
• Repairing equipment that has you unable to sell.
• Covering payroll while you collect on a large job that's already finished.
• Grabbing a supplier discount that saves you more than the financing costs.

It doesn't make sense for covering losses month after month. If your sales don't cover your expenses, more debt only makes the hole bigger. If you want to raise your score so you can get something cheaper later, start with 7 ways to boost your credit score.

How to read a short-term offer

Before you sign, put these questions to any offer and get the answers in writing:

1. How much lands in my account? Origination fees are sometimes deducted from the approved amount.
2. How much do I repay in total? Ask for the total figure, not just the daily or weekly payment.
3. How often do I pay? Daily, weekly or as a percentage of sales. A daily payment feels small, but it comes out every business day.
4. What happens in a bad week? With a percentage of sales, you pay less when you sell less, though there are usually minimums. With a fixed payment, you pay the same even if you don't sell.
5. Is there a discount or a fee for paying early? Some don't charge for early repayment; others give nothing back.
6. Do they require a personal guarantee? It's common. Understand what it means before you sign.

A useful rule: the payment has to fit your worst week of the year, not your best. If it only fits the good weeks, borrow less or ask for a different term.

Mistakes that sink businesses with bad credit

• Stacking advances. Taking a second or third advance to cover the first is the most common trap. If you're already there, read how to lower an expensive MCA payment.
• Applying everywhere on the same day. Multiple hard inquiries lower your score further, and several offers signed at once leave you with payments you can't keep up with.
• Believing in sure-thing approvals. No serious funder can promise one. Be wary of anyone who charges upfront.
• Not reading the contract. If it isn't in a language you understand, ask for an explanation or take it to someone you trust. Merchant Fund Express offers Spanish-speaking support.
• Ignoring what caused the bad credit. If there are accounts in collections or errors on your report, deal with them; every month they sit unresolved costs you.

When Merchant Fund Express is the right fit

It fits if you have steady sales hitting your account, your score is below what a bank wants, and you need the money within days. It also fits if you don't sell through Square, PayPal or Shopify, since their programs only work for merchants who already process with them. And it accepts applicants with an ITIN (no SSN needed).

You can apply with Merchant Fund Express online. Applying is free, doesn't affect your credit and shows you how much you might get before you decide. If you have time and your need isn't urgent, also compare a CDFI: if you qualify, it usually comes out cheaper. Leer en español.