Yes, you can get a business loan even if your personal credit score is bad. But it is more challenging and often comes with trade-offs, such as higher interest rates, shorter terms, and stricter requirements. Lenders use credit scores to assess how likely you are to repay the loan, so a low score signals higher risk to them and limits your options. But there are chances, which I discussed below.
Can You Get Business Credit with Bad Personal Credit?
Major banks typically prefer borrowers with strong credit histories. In India, especially, a low CIBIL score (below 650) can reduce approval chances or push banks to offer smaller loan amounts at higher rates. However, it doesn’t always disqualify you completely if other factors are strong.
Many online lenders, NBFCs, and fintech platforms specialise in business financing for borrowers with poor personal credit.
Some may approve applicants with scores as low as 500. Though interest rates and fees tend to be higher and repayment terms shorter compared with traditional bank loans.
Offering collateral, such as property, equipment, inventory, or personal assets, reduces lender risk. It can significantly improve approval chances even with bad credit.
Having a co-signer with good credit or showing strong business revenue, cash flow, and a solid business plan boosts your credibility. Some lenders place more emphasis on business performance than solely on personal credit.
If getting a loan is difficult, consider alternatives, like invoice factoring, merchant cash advances, or funding from friends/family. These options might require less strict credit checks, but often come at a cost.
You can get a business loan with bad personal credit, but expect higher interest costs, more documentation, and alternative lender requirements. Hope this answers your query about can I get a business loan with bad personal credit.
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Can I Get a Business Loan with Bad Personal Credit?
ruchi
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2026-01-22T09:11:46+00:00 2026-01-22T09:11:50+00:00Comment
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