Ways to Finance your Business

Getting approved for business loans can be tough — and it’s even more challenging when you have a low credit score. But if you’re searching for how to get a business loan with bad credit in 2025, the good news is that financing options still exist. Lenders are more flexible than ever, and creative funding solutions can help you launch or grow your business even without perfect credit.

In this guide, you’ll learn practical steps to get a loan for business, explore the best business financing options, and increase your chances of approval — even with bad credit.

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Why Your Credit Score Matters for Business Loans

Your credit score plays a major role in determining:

Whether you’re eligible for a small business loan
How much you can borrow
What interest rates you’ll be offered
Whether you need collateral or a personal guarantee

But in 2025, more lenders are looking at the full picture — business revenue, cash flow, time in operation — not just credit scores.

Understand Your Credit Profile

Before applying, check your personal and business credit reports. This helps you:

Spot and dispute any errors
Know which business financing options are realistic
Strategically apply for startup business loans or credit lines you may qualify for

You can check your credit for free using tools like Credit Karma, Nav, or Experian.

Explore Alternative Business Financing Options

If traditional banks reject your loan for business, consider the following:

Consider a Business Line of Credit

A business line of credit is a flexible option for entrepreneurs with less-than-perfect credit. Once approved, you can borrow what you need — when you need it — and only pay interest on the amount used.

Lenders offering this in 2025 often look at your monthly revenue, not just your FICO score.

Look Into Government Business Loan Programs

Many countries offer government business loans for underserved or credit-challenged entrepreneurs. These often have:

Lower interest rates
Longer repayment terms
Credit-building opportunities

In the U.S., for example, SBA microloans and Community Advantage loans are available through nonprofit lenders. Similar schemes exist in the UK, Ireland, and Canada.

Use a Business Loan Calculator

Before applying, use a business loan calculator to understand:

Total repayment cost
Monthly payments
ROI potential

This helps you avoid high-risk loans and identify the most affordable purchase financing or credit solutions.

WConsider Self-Funding or Friends & Family

If you’re still unable to qualify for a loan, look into:

Combining this with crowdfunding for business to get your startup off the ground
Self-funding a business using savings, a side job, or asset sales
Borrowing from friends or family with written agreements

Improve Your Approval Odds

To boost your chances of getting approved:

Add a co-signer with better credit if needed
Build a solid business plan that outlines your revenue model
Maintain consistent business income (if applicable)
Offer collateral to reduce lender risk

You Can Still Get a Business Loan with Bad Credit

Having bad credit doesn’t mean you’re out of options. From business lines of credit and equipment financing to startup business loans and crowdfunding for business, there are multiple ways to fund your venture in 2025.

The key is to match the right business financing option to your current situation — and plan for long-term financial health. Even if you start small, smart funding choices now can position your business for sustainable growth in the years to come.

Equipment Financing Explained: How to Fund Tools, Vehicles & Tech (2025 Guide)

Need to upgrade your tools, buy a delivery van, or invest in new technology — but don’t want to drain your cash reserves? Equipment financing might be the smartest way to grow your business without sacrificing working capital.

In this guide, we break down what equipment financing is, how it works, when to use it, and how it compares to other business financing options — including business loans, lines of credit, and even purchase financing.

What Is Equipment Financing?

Equipment financing is a type of business loan designed specifically to help you purchase physical assets — such as machinery, vehicles, office tech, or tools — that your business needs to operate.

Instead of paying the full cost upfront, you borrow money and repay it in fixed monthly installments. In most cases, the equipment itself serves as collateral, which makes approval easier — even if your credit isn’t perfect.

What Can Be Financed?

Most tangible, depreciable business assets qualify. Common examples include:

Construction equipment (excavators, bulldozers)
Restaurant appliances (ovens, fridges, fryers)
Medical and dental devices
Delivery trucks or company vehicles
Computers, servers, POS systems
Office furniture and fixtures

If it helps generate revenue or improve operations, there’s a good chance it can be financed.

Equipment Financing vs Other Business Financing Options

How does equipment financing compare to other popular methods?

Feature	Equipment Financing	Term Loan	Business Line of Credit
Loan Purpose	Asset-specific	General use	Working capital
Collateral	Equipment itself	Business/personal assets	Sometimes required
Approval Speed	Fast (1–5 days)	Moderate	Fast
Ownership	You own the asset	Varies	Not asset-based

Equipment financing is often easier to qualify for than a small business loan or business line of credit because the loan is secured by the asset you’re buying.

Why Your Credit Score Matters for Business LoUse a Business Loan Calculator Before You Commit

Before signing any financing agreement, use a business loan calculator to estimate:

Monthly payments
Total loan cost over time
Interest paid
Breakeven point

This helps ensure your investment delivers a return and supports long-term cash flow health.

Is Equipment Financing Right for Your Business?

It may be the right choice if you:

Need to replace outdated or broken equipment
Want to expand without using up your cash
Have inconsistent cash flow
Prefer fixed payments for budgeting

It’s particularly popular among startups and small businesses that don’t qualify for large startup business loans or don’t want to risk taking on unsecured debt.

Self-Funding a Business: Pros, Cons & Strategy Guide

Not every entrepreneur wants to rely on outside investors, banks, or complex funding platforms. If you’re seeking independence and control, self-funding a business — also known as bootstrapping — might be the smartest route to launch and grow your company on your own terms.

In this guide, we’ll explore what self-funding a business really means, when it works best, and how it compares to other business financing options like loans, crowdfunding, and venture capital. You’ll also learn practical strategies to make your self-funded startup successful in 2025 and beyond.

What Is Self-Funding a Business?

Self-funding a business means launching and operating your startup using your own money — whether from personal savings, day job income, home equity, or selling assets — instead of relying on business loans, investors, or government grants.

It’s the ultimate DIY approach to how to finance a business — giving you 100% ownership, full control, and no outside interference.

Pros of Self-Funding Your Startup

Cons of Self-Funding

Self-Funding vs Other Business Financing Options

Financing Option	Ownership Impact	Risk Level	Speed	Funding Amount
Self-Funding	100% ownership	High	Fast	Limited
Small Business Loan	None	Medium	Medium	Moderate
Business Line of Credit	None	Medium	Fast	Variable
Crowdfunding for Business	Shared perks	Low	Medium	Moderate
Venture Capital	Equity loss	Low	Slow	High
Government Business Loan	None	Low	Slow	Moderate

Self-Funding Strategies That Work

Here’s how to maximize your self-funded startup success:

Bootstrap Smart, Grow Strategically

Self-funding a business isn’t about struggling alone — it’s about starting lean, staying in control, and building something sustainable. While the path may be slower than taking a small business loan or equity investment, the long-term rewards of ownership, freedom, and pride are worth the hustle.

With a clear business plan, strong cash flow focus, and growth mindset, self-funding can be the first step toward long-term business success — and future funding options that are on your terms.