Alternatives to High-Risk Business Loans

Get a line of credit up to $100,000. You don’t need perfect credit to apply.

What's your desired credit limit?

What repayment term works for you?
How often do you want to make payments?

Weekly Payment Amount*:

$424.00 Apply Now

We’re currently accepting new customer applications. Applying will not impact your credit score.

Applying will not impact your credit score.1

*This business loan calculator assumes a monthly interest rate of 3.3% and a 2% draw fee. Your interest rate and credit limit may vary based on your application. No draw fee in CO, GA, IN, NJ and OK.

High Risk Business Loans

High-risk business loans are typically small business loans that are offered to businesses with poor or little credit. Because lenders will determine the risk of the loan based on the business’s credit history, borrowers that are deemed “high-risk” generally receive smaller loan amounts at greater interest rates — if approved for anything at all. Therefore, “high-risk loans” doesn’t refer to the risk the borrower takes on, but rather the risk the lender takes on that the borrower won’t repay.

What Makes a High-Risk Business Borrower?

High-risk business borrowers share many of the same traits — typically some combination of: low credit score, recent credit issues, little-to-no business credit history, poor cash flow, industry volatility and classification as a sole proprietorship. Generally, a business credit score below 550 is considered to be high risk; and if the business is less than two years old, it could be considered high risk.

Any business owner who has any of those marks will want to do a thorough inspection of their business credit report before applying for credit and improve whatever areas they can. Once the credit report is as clean as possible, options can exist for businesses in most areas of the credit spectrum.

Alternatives to High-Risk Business Loans

Many traditional lenders, such as banks, won’t lend to businesses with little or poor credit. That’s why a number of alternative lenders have been created to fill serve this niche. If you’re a business owner who needs financing but has poor or little credit, you’ll need to learn what your best options for obtaining credit are.


Secured Loan

One of the more popular ways to obtain funding with less-than-perfect credit is to secure the loan with collateral. Businesses can offer inventory, equipment, auto titles and other forms of property as collateral, which they risk losing if they default on the secured business loan.


Peer-to-Peer Lending

The digital age has made it easier than ever for businesses to receive funding, and this has become one of the more popular options. Certain websites provide peer-to-peer lending, where a business owner can post the type of loan they are looking for and a “peer” lender (an individual person) can serve as an investor for the companies they like.


Get a Co-Signer

Banks and traditional lenders may still approve your business for funding if you have a person with good credit to guarantee your loan. If a friend or family member really believes in you and your business, they can co-sign the loan and take on the risk.


Credit Unions

While credit unions do carry some of the characteristics of traditional lending, they can still be a good option for businesses with less-than-perfect credit. Because many credit unions serve industry-specific businesses, you may have an increased chance of approval through one if it serves your industry.


Alternative Lenders

Online lenders like Headway Capital will often use non-traditional methods of reviewing applicants to determine a business owner’s creditworthiness. This means that even if your credit score is less-than-perfect, you still can be considered — and in some cases approved — for a loan.

Headway Capital’s True Line of Credit™

If you feel like your business falls into the high-risk category, we’d like to be the judge of that for ourselves. At Headway Capital, we offer a business line of credit that is fast and flexible. We allow you to apply online within minutes — without affecting your credit score — and we’ll quickly let you know if you are eligible. If approved, you can receive the funds in your bank account as soon as the next business day!

Credit Line

Up to

Repayment Term

12, 18 or 24 months

Payment Frequency

Weekly or monthly

Loan Type

Business line of credit

No Hidden Fees

See our Rates & Terms for details

Clear Cost

Clear payment terms, interest does not compound, no penalty for early payoff

1We always do a soft inquiry unless your credit file is restricted, in which case we would ask you to contact the credit bureau to lift the restriction. Doing so may result in a hard pull.