5 Best Business Loans Bad Credit Reviewed in 2024 | Alternative Lenders for Small Businesses

January 22, 2024 | Editorial Team

If you have ever thought about starting a business, one of the main things that may have stopped you is a shortage of money. Businesses are expensive, especially when you’re first starting out. Many new business owners will try to get a loan to get their business started. If you have a bad credit score, however, getting a bad credit business loan from a traditional lender can be almost impossible.

Thankfully, there are alternative lenders for small businesses. Alternative lenders, such as the ones we’re going to discuss, are more than willing to offer a business loan with bad credit. Loans Canada, Borrowell, LoanConnect, Mogo and Fairstone are all great options for a business loan with bad credit. Let’s look at the pros and cons of each lender/ lending platform. In addition, look no further if you need business insurance or the best business credit card.

1. Loans Canada

Loans Canada is not a lender itself; it is a lending platform. This is a type of search engine that helps Canadians with bad credit find the best lender for their business loans. They created their search engine to help Canadians with poor credit finance their businesses.

Loans Canada is partnered with a huge number of lenders across Canada. They act as a middleman between you and the loan provider. Searching for loans on their website is quick and easy.

You simply need to input your personal information and your business information. You then have to select your required loan amount, loan repayment term and any additional information that is required. Loans Canada will then provide you with a list of loan providers.

Loans Canada also offers a useful loan calculator on their website. This can help you see an estimate of your loan and your repayments. Inputting your personal or business credit score will improve the accuracy of the results.

The lenders they partner with also offer secured and unsecured personal loans and debt consolidation loans. Loans Canada is also partnered with lenders that specialize in bad credit loans. Even if you or your business have bad credit, you are still likely to be accepted for a loan. Some lenders even offer up to $300,000.

Loans Canada also provides some extremely useful tips on their website for businesses with a bad credit rating. This includes information on how to improve your approval odds and the documents you should prepare. They will also educate you on the different types of loans that may be available to you.

This may sound too good to be true, so let’s take a look at the pros and cons of this search engine.


  • Small businesses can receive up to $300,000, depending on the lender.
  • Your business can choose your term up to a maximum of 60 months.
  • Even those with a poor credit score can get a decent interest rate. Interest rates range from 5.49% to 25%. The lower your credit score is, the higher your interest rate tends to be. However, Loans Canada typically offers lower interest rates than other lenders.
  • You don’t need to put up any collateral, although you can choose a secured loan if you want to.
  • There is no minimum credit score or annual income requirement.
  • The website is easy to use and navigate. Your results will be easy to read, as all the information will be put into a chart to compare your borrowing options.
  • There is no brick-and-mortar location, so the whole process is completed easily online.
  • If you are approved, you will usually get your money within 48 hours.
  • The Borrower Community asks borrowers to rate and review lenders. Loans Canada will then remove any lenders from their platform who have consistently bad reviews. You can easily access previous borrowers’ reviews.


  • You may be charged a higher interest rate if you have a bad credit score.
  • Although Loans Canada works with a wide range of lenders, your business is limited to only their partners.
  • If you repay your bad credit loan in full earlier than the term you agreed upon, you may have to pay a fee.


If you need a bad credit business loan, Loans Canada is more than happy to help. As they work with plenty of lenders, they can help you find the perfect bad credit loans, regardless of your credit score.

This search engine is also a good choice for a business looking for bigger loans. The maximum amount that Loans Canada offers is $300,000. You can choose a loan term between 6-60 months.

Instead of having to contact a variety of lenders yourself, Loans Canada will do the work for you. Don’t let your bad credit score get in the way of getting the perfect bad credit business loans. Another useful tool that can help you with this is Loans Canada’s business loan calculator. This can help you see an estimate of your business loan and your expected repayments.

Visit Loans Canada’s website today for more information on their business loans for bad credit.

2. Borrowell

Borrowell is one of the largest online lenders in Canada. They have over 50 financial partners across the country. They currently have more than a million members on their online platform.

Borrowell is a loan platform that acts as a search engine. They match you with a loan provider and then act as the middleman between you and the lender. They specialize in both business loans and bad credit loans. Their bad credit loans are recommended for anyone with a credit score lower than 575.

Borrowell was the first lending platform to offer free personal credit checks. They aim to encourage Canadians with a low personal credit score to improve their borrowing options. By first checking your personal or business credit score, you can see whether you are likely to be approved for a traditional business loan. Borrowell will then show you a list of loan providers who are likely to accept your application.

Credit scores are provided by Equifax, which is partnered with Borrowell. You can also view weekly updates to your credit score. This can help you to improve the credit score of your business.

 Borrowell also offers personal and car loans, mortgages, and debt consolidation. It could be a one-stop shop for all your financial needs.

Loans are available from $500-$35,000 with loan terms ranging from 6-60 months.

Let’s take a look at some of the pros and cons of applying for your business loan with Borrowell.


  • Borrowell will let you check your credit score every week without it lowering your credit score.
  • Borrowell shows you the likelihood that you will be approved for a loan without performing a credit check. This helps to protect your credit score.
  • Borrowell also helps its customers to improve their credit scores. You can receive free personalized tips weekly. Customers have seen their credit rating improve by an average of 15 points after signing up to Borrowell.
  • Flexible repayment options are available. You can repay your loans earlier than your agreed-upon term without paying a fee.
  • Loans are typically given within 48 hours after you are approved.
  • You only need a yearly minimum income of $20,0000 to meet the eligibility criteria.
  • Although Borrowell is based in Toronto, they offer loans to Canadians everywhere.
  • No hidden fees. Borrowell values transparency.
  • Interest rates start as low as 5.6% and go up to 29.19%.
  • A hard credit check is not performed until you submit a loan application. This helps to protect your credit score.
  • Borrowell has no brick-and-mortar locations. This means everything can be done easily and quickly online.
  • You could also get personal or car loans, debt consolidation or a mortgage with Borrowell.
  • You can see your credit score raise when you pay your loans on time.
  • You can choose to take a secured or unsecured loan.


  • Borrowell has stricter eligibility requirements than other bad credit business lenders. If you have bad credit or your income is too low, you likely will not get approved.
  • Borrowell charges a one-time fee called an origination fee. It is typically 1% to 5% of your loan.
  • Your business can only get a maximum of $35,000 from Borrowell.


If you don’t want to go through the effort of weeding through multiple lenders, working with Borrowell may be a good choice for you and your business. The weekly credit score updates and personalized tips and advice can help to improve the financial future of your business.

Borrowell is a trusted loan platform in Canada. They value good customer services and offer transparent fees. Their bad credit loans can be great for those with a lower credit score.

However, if you are looking for a loan bigger than $35,000, Borrowell may not be the best option for you. Many businesses, especially larger companies, will require a higher loan amount and may want to look elsewhere.

Borrowell is a reputable lender with a decent interest rate. So, getting a loan from them, if you are eligible for it, can be beneficial. Visit their website today for more information.

3. LoanConnect

Another business loan search engine is LoanConnect. LoanConnect is a Toronto-based company that has been helping Canadians everywhere, even those with bad credit, since 2016. They act as a middleman between you and the loan provider.

They partner with lenders that offer a variety of loans up to $50,000. There are loans for students, emergencies, home renovations, cars, and businesses. LoanConnect also partners with lenders that specialize in bad credit loans.

The application process is done online and will only take around five minutes. Once you input your loan type, personal information, and financial information, you’re more than halfway done! LoanConnect will display each lender you are eligible to work with, so you can apply directly with them.

You can also apply for pre-approval. This involves LoanConnect accessing your credit score. They will then provide you with a list of lenders that are likely to accept your application. You can then customize these results based on your requirements. Applying for pre-approval protects your credit score. This is because it reduces the likelihood that your loan application will be rejected.

There is no minimum credit requirement with LoanConnect. This means you can apply for a business loan even if your personal or business credit score is low.

Loans are available between $500-$50,000. Loan terms range from 6-60 months.

Below are some of the pros and cons of applying for a business loan with LoanConnect.


  • Canadians with bad credit scores are still welcome. LoanConnect has no minimum credit score or annual income requirement.
  • The eligibility criteria are not as stringent as other loan platforms. You just need to be Canadian and of the age of majority in your province to qualify. Your debt must also be less than 60% of your income.
  • Interest rates can start as low as 4.6%
  • LoanConnect is a free service, and there is no pressure to work with any lender they suggest.
  • LoanConnect has 12 different loan types, so there is something for everyone.
  • They are partnered with lenders who specialize in business loans and bad credit loans.
  • Canadians from any province or territory are eligible.
  • Even those with a bad credit score can customize their loan to fit their requirements.
  • LoanConnect does not perform a hard credit check until you submit an application. This helps to protect your credit score.
  • The online platform is user-friendly. It is quick and simple to search for loans and submit an application.
  • Searching for loans on LoanConnect is completely free and has no obligation.


  • Your interest rate will be higher if you have a bad credit score.
  • LoanConnect will only suggest a lender they partner with.
  • If you need more than $50,000 for your bad credit business loan, LoanConnect cannot help you.


As LoanConnect is a free search engine, it is a great option for those looking to compare multiple lenders at once. The search engine is also readily available to Canadians from all over, even those with bad credit. So even if you were rejected by the bank, LoanConnect could still help you find the perfect business loans.

If you have a lot of debt, however, this search engine may not be able to help. Similarly, if you need a business loan of more than $50,000, you will need to look elsewhere.

If you are still unsure, you can search for available loans and access a personalized list of lenders for no fee and with no obligation. This can help you to view your options and see the loan you are likely to be eligible for and the interest you are likely to pay. Visit LoanConnect’s website today to begin your loan search.

4. Mogo

Mogo is a popular loan provider in Canada. They have provided more than 1.6 million loans and are growing in popularity. They provide loans for a variety of purposes. This includes business expenses, debt consolidation and personal loans. They also offer financial products including mortgages, VISA prepaid cards and cryptocurrency trading.

Mogo has a free credit score service. You can access your credit score free of charge and use this information to show you which loans you are likely to be accepted for. You will also see an estimate of your interest rate and repayments. This is known as pre-approval. You can be pre-approved for your business loan in only three minutes. Once you have submitted an application and your loan has been approved, you can receive your funds the very same day.

Loans are also available if you have a bad credit score, although the interest rate is likely to be higher. Mogo offers loans between $100-$35,000. Loan terms range from 9-60 months. APR ranges from 5.9%-46.96%.

Let’s take a look at some of the pros and cons of choosing Mogo for your business loan.


  • Signing up for Mogo is free and you can instantly access your credit score. There is also no fee when searching for loans.
  • You can access monthly updates to your credit score and view previous months’ credit scores. Mogo will provide tips and advice on how to improve your credit score further.
  • A 100-day test drive is available. If you are not completely satisfied with Mogo, you can cancel your loan and pay back your principal. Mogo will then refund you any interest or fees you have already paid.
  • You can pay off your loan at any time with no fees.
  • The online dashboard and mobile app are user-friendly. They also offer useful features such as payment information, credit score features, and the purchase of cryptocurrency.
  • Access the Mogo Rewards Program to receive perks including free bitcoin, fraud identity protection and a free MogoCard.
  • Receive daily tips and advice on a variety of financial topics from Mogo’s Money Moves.


  • Mogo has a minimum credit score requirement of 540. If your credit score is lower than this, you will not be accepted for a loan.
  • There is also a minimum annual income requirement of $13,000. This could be problematic for new businesses.


Mogo offers some great features, including their free credit score checking and their 100-day test drive feature. This can help offer peace of mind to business owners who are unsure about the best loan option for their business.

The minimum credit score requirement of 540 could be problematic for those with bad credit. The lower your credit score, the higher your interest rate is likely to be. APR on Mogo loans can be as high as 46.96%. This could result in high monthly repayments.

However, Mogo also offers great perks, including its rewards program and educational resources. Visiting their website and receiving a quote is free and has no obligation, so you have nothing to lose.

5. Fairstone

Although Fairstone does not offer specific business loans, we have included this option because of their bad credit loan options. Instead of a traditional business loan, you can choose a secured or unsecured personal loan and use it for your business. If you have a bad credit score, Fairstone may still be able to offer you a loan.

Fairstone has been providing loans for more than 100 years. They offer loans between $500-$50,000. Loan terms range from 12-120 months.

Fairstone offers a useful loan calculator on their website. You input your personal details and information about your required loan. You will then receive a list of quotes. You can toggle the options to see how payment frequency, loan term and loan amount can affect your repayments.

Once you have chosen a loan, you will be connected with your own 1:1 lending specialist. They will help you to customize your loan and complete the application.

To help you decide if Fairstone is a good option for you, let’s take a look at some of the pros and cons.


  • You can choose to make your repayments monthly, semi-monthly, or bi-weekly.
  • If you are a homeowner, you will likely have access to lower interest rates and higher loan amounts.
  • Funds can be deposited into your account the same day your application is approved.
  • The loan calculator allows you to view an estimate of your loan quickly and easily.
  • Additional resources such as education tips and advice are available on the website. Debt management tools are also available.
  • You can opt for a fixed-interest loan.


  • Your application may not be accepted if your credit rating is lower than ‘fair’.
  • Loans larger than $50,000 are not available, which could be a problem for some businesses.


Fairstone offers some great perks, including its loan calculator, educational resources, and debt management tools. The flexible repayment options could also be a huge advantage to many business owners.

The main drawback to choosing a loan with Fairstone is their lack of business loan options. They also do not offer loans higher than $50,000, which could be problematic for many businesses.

However, if you are a smaller business, Fairstone could be a fantastic option. Visit their website today for more information.

Business Loan Fees Explained

If you have ever applied for a loan from either a bank or a lender, you have likely been charged a variety of fees. This tends to be how a bank and lender make most of their money. The biggest issue with these fees is how much they vary, depending on who you are getting money from. So, it is important that you know and understand what these fees are beforehand.

The main fee you will encounter with a bad credit business loan is the interest rate. Lenders tend to charge those with bad credit a higher interest rate as they are taking a higher risk lending to you. The interest rate can be a fixed rate or a floating rate. Often, the lender will let the business owner choose.

Depending on the lender, you will also have to pay an origination fee, sometimes simply called a registration fee. It is charged when you first apply and is used to process your small business loan application.

If your payment is late or rejected, you may also be charged a fee. This is meant to encourage you to pay on time every month.

Some lenders also charge a fee to process your payment every month. This is typically called an administrative fee and can range from $50 to $100. In addition, your business could be charged a transaction fee to process the payment every month. If there is a transaction fee, it will vary depending on the payment method. Wire transfers tend to be more expensive than direct deposits, for example.

Depending on your small business loan agreement, you may not be able to make an early repayment. If you do repay it early, there could be a fee. Another option is to take advantage of a business savings account to accumulate interest and pay the loan back earlier, rather than paying a fee each time you make an early repayment.

The Bottom Line

Many new business owners are hesitant to apply for a small business loan, especially if they have a poor personal credit history. One of the best ways to fix your credit score, though, is to take out loans and repay them on time. There are plenty of options to get a small business loan, regardless of your personal credit history. Don’t let your credit score hold you back from opening your business.

It is important as a business owner, you understand all of the lender’s conditions before agreeing to anything. Similarly, it is better to get multiple quotes beforehand, so you know your business is getting a good deal.

Loans Canada and Loans Connect are great places to search for bad credit small business loans. Borrowell is also a good lender for small businesses. Get out there and start your business today, bad credit or not!