Business loans for startups with bad credit

• Cash flow challenge: Start ups struggling to find financial solutions for their start ups business due to bad credit.

• Perfect for: Business startups looking to secure business loans to help them grow and find a solution in regards to their poor credit.

Novuna helps startups access business loans to support growth and sustainability during the early stages of building a business, with funding options designed around your circumstances, affordability, and future plans. Speak to our experts today to find a great fit for your situation.

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What does bad credit mean for startup funding?

Bad credit can include missed payments, defaults, or limited credit history. For startups, this is often linked to personal credit rather than business credit, as many new businesses have not yet built a financial track record.

Lenders typically assess:

• Personal credit history of founders or directors

• Affordability and current financial position

• Business plans and revenue projections

Bad credit does not automatically rule out funding, but it can affect the types of finance available and the amounts offered.

Are business loans available for startups with bad credit?

For most startups, fully unsecured business loans are difficult to access in the earliest stages, particularly where there is no trading history.

In practice:

• Government-backed Start Up Loans are often the first funding option available to startups with bad credit.

• Funding amounts are usually modest and based on personal affordability.

• Commercial lenders generally require some trading history before offering business loans.

As a startup begins trading and generating revenue, additional funding options may become available.

Government-backed funding for startups with bad credit

Government-backed schemes play an important role in supporting new businesses.

Start Up Loans, for example, provide:

• Unsecured funding for individuals starting or growing a business

• Fixed interest rates and structured repayment terms

• Additional support such as mentoring

These schemes can be a valuable starting point, particularly where commercial lending is not yet suitable.

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When commercial loans become more realistic

Business loans typically become more accessible once a startup has:

• Started trading

• Built a record of income

• Demonstrated the ability to manage repayments

At this stage, lenders may consider recent bank statements, cash flow trends, and overall business viability rather than relying solely on historic credit issues.

Alternative funding options for startups with bad credit

Business loans are not the only way startups fund early growth.

Depending on the business model, founders may also explore:

• Invoice-based funding once invoices are being raised
• Asset finance for vehicles, equipment, or machinery
• Short-term working capital loans to manage early cash flow gaps

Understanding how these options work can help startups choose funding that aligns with their stage of growth.

Things to consider before applying for funding

• The level of personal liability involved
• Whether repayments are affordable without predictable income
• How funding fits into longer-term growth plans
• Whether waiting until trading is established may unlock better options

Careful planning can help reduce financial pressure during the early stages of a business.

How Novuna Business Cash Flow can help

At Novuna Business Cash Flow, we support startups by helping them access the right funding they need for their sustainability and growth.

Speak to our experts today and find a great fit for your situation.