Business Funding With Challenged Credit: Options That Are Actually Open
Below 600, revenue replaces credit as the underwriting input. Here is what that opens, what it costs, and how to climb out.
June 9, 2026 · 7 min read
A challenged personal credit score narrows the menu; it does not empty it. Once you are below roughly 600, lenders stop underwriting your score and start underwriting your deposits, your receivables and your assets. Knowing which of the three you have is the whole exercise.
Options underwritten on revenue
- Revenue-based term loans on bank statements only, often available from 500 FICO with consistent deposits and few negative days.
- Invoice factoring, where the credit decision rests on your customer's credit, not yours — the best-priced option for B2B businesses with slow-paying accounts.
- Equipment financing, secured by the asset, available well below 600 with a larger down payment.
- Merchant cash advances — available almost universally, and the option to use last and smallest.
What it costs
Expect factor rates from 1.20 to 1.49 and terms from three to eighteen months. Factoring typically costs 1 to 4 percent of the invoice per 30 days. Equipment financing below 600 often prices in the high teens to low twenties annually. These are expensive relative to a bank, and appropriate when the capital produces a return inside the term.
The purpose of challenged-credit funding is to be temporary. Every file should carry a written plan for reaching bank-quality terms within 12 months.
The 90-day climb
- Pull all three personal reports and dispute genuine inaccuracies in writing; errors appear on a meaningful share of files.
- Bring revolving utilization under 30 percent, then under 10 percent. Utilization is the fastest-moving score input.
- Resolve collections with pay-for-delete language where the collector will agree in writing.
- Add a secured card or become an authorized user on a seasoned, low-utilization account.
- Eliminate negative days in the business account — three or fewer a month reopens dozens of lenders.
- Build entity credit through net-30 vendor accounts so the business can eventually stand on its own file.
Two things to refuse
Refuse any lender who asks for a large fee before funding — legitimate brokers are paid at close. And refuse to stack advances. A second, third and fourth position is how a fixable credit problem becomes an unfixable cash-flow problem.
Where this ends
Owners who execute the climb typically move from a 1.35 factor product to a bank-statement term loan within nine months, and to a line of credit inside eighteen. The capital gets cheaper each round, which is the only measure of whether the strategy is working.
