Bad Credit Small Business Loan

There are many excellent ways for people with bad personal credit to get small business loans.

Bad credit small business loans with a partner

A good way to get a small business loan is to find a partner with good credit and form a partnership. The partner can apply for the loans and lines of credit and get them. Another way to do this would be to have the partner own the business and make the person with bad credit an employee. That way only the person with good credit’s credit record would get checked when applying for a loan.


Another way to separate your bad personal credit from your business is to start a corporation. There are a number of corporation options available including limited liability corporations or LLCs. Since a corporation is a separate legal entity from its owner it might be able to get loans or lines of credit that the owner can’t.

There are a wide variety of incorporation options available to businesses today. Many of these can be done without the services of a lawyer. There are many online legal services such as that incorporate businesses for a few hundred dollars. Most of these services charge a fixed rate for setting up an LLC or similar corporation.

One way to get credit once you have a corporation set up is to put a piece of real estate in the corporation’s name. That way you can take out a mortgage or equity loan in the name of business. This way the real estate would serve as the collateral for the loan.

Once you have a corporation another way to raise money for the business is to sell stock or investments in the business. You could sell the stock to your friends in family or to professional investors. There are people called angel investors and venture capitalists who specialize in investing in small and start up businesses. If you issue stock these people might loan money in exchange for a stake in the business.


There are many groups of angel investors and venture capitalists who actively invest in small business. You can locate them over the internet and through community organizations like the Chamber of Commerce.

Another group of people who might be willing to invest in your business are your customers. If your customers really like your business and its products they might be willing to invest. If you incorporate your business you might be able to sell stock in your business to your customers.

Forming a corporation can enable you to find more loans and sources of financing for your small business.