The first time you apply for credit, a credit bureau begins to collect information (negative and positive) on how you manage that credit. Your ability to use credit is a credit score. A credit score of 650 or less is considered low or bad. With a low credit score, which is a risky borrower, which affects how much money you can borrow and at what rate. Credit utilization is one of the main factors that impacts your credit score. In this situation, some of your business financing options are a Merchant Cash Advance or a Term Loan . By using one of these products, you can receive business financing, without impacting your personal credit score.

Bad credit business financing options

Bad credit business financing options

Save your credit utilization!

Merchant Cash Advance (MCA) is one of the easiest ways to ensure that your credit utilization stays low. Fill out this form to find out how much you can borrow.

Check amount!

Your borrowing options are very limited. For small business owners, the most common reason for credit is. Credit utilization is the percentage of your credit that you are using.

As a business owner, you want to get into the business. This leaves you with a credit card on a monthly basis. You are able to pay them back, but at any given time, all of your credit cards are used . Even though you are not doing bad, the credit bureau sees this bad credit . The FCAC recommends keeping your credit utilization under 35%, which is just not realistic for a small business owner. Which results in a lower credit score in comparison to non-business owners.

Let’s do the math!

For example, if you have a credit card with a $ 10,000 credit limit and a $ 10,000 limit, your available credit is $ 20,000 . If you have used $ 7,000 , that is 35% credit utilization . FCAC recommends maintaining credit utilization at or lower than 35% to keep a good credit score.

Selon the Financial Consumer Agency of Canada (FCAC) is negative information your credit report as long as stay for 6 years, it’s very significant to know your options When It Comes to financing. Since most businesses need financing to keep going or growing, going 6 years without any, can be detrimental for any business. So the alternative is to receive business financing that does not depend completely on your credit score.

1. Using a Cash Advance Merchant to receive business financing

business financing

A Merchant Cash Advance allows a small business owner to use their daily income to get business financing. Unlike traditional loans, your eligibility for borrowing is not completely determined by your credit score. It also does not require any upfront collateral. With an MCA, the lender takes a portion of your daily paper (debit and credit). MCAs are ideal for a business owner that has a bad credit history, to keep a steady stream of financing. Since this is a completely digital solution, there is no risk of bounced checks or missed payments.

2. Getting a loan Loan to free up credit

2. Getting a loan Loan to free up credit

A term loan is better than larger than a retail merchant advance can offer. The term loan can be used in the form of a revolving loan . Once you improve your credit score (takes approximately 6 months), you will have paid off and you will be able to save your money. The criteria for a term of payment are as follows: However, this may be a small price to pay for your credit score and make yourself up for cheaper financing in the future.


Revolving loans are not specific to the principal balance. However, the minimum payment must be paid by the required deadline in each case. Term loans have a fixed deadline, hence they are not part of the credit equation. This means that you can use your credit card, boosting your credit score!



A small business owner ‘s credit score can become bad very quickly. Since they are almost always operating their business credit, their credit scores. Luckily, there are financing options available for business owners that have bad personal credit. A cash advance merchant can be used for a small business in a short time by their credit card sales, which can be conveniently paid in small bite-sized portions daily. A term loan can be borrowed and leveraged to decrease credit utilization, just long enough to boost your credit score.