The FICO bands and what each one gets
"Bad credit" is a 70-point spread and the available product list is dramatically different at each end.
540-579
LOC almost unavailable. A few specialty lenders fund at this band with $10-25K limits at 28-35% APR. Better options: MCA, equipment financing with collateral.
580-619
LOC available through specialty broker network. $25-50K limits, 22-30% APR. Requires 12+ months in business and $25K+ monthly revenue.
620-669
Alternative-lender LOC market opens. $25-100K limits, 18-28% APR. Most online LOC lenders place files in this band routinely.
670-739
Bank LOC starts to become available alongside alternative lenders. $50-150K limits, 12-22% APR. Best balance of access and cost.
740+
Full market access. Banks, alternative lenders, specialty lenders. $50-250K limits, 8-18% APR. Cheapest LOC pricing available.
The brutal honest part: most owners searching "business line of credit bad credit" are in the 580 to 660 range. That is exactly the gap where the broker model adds the most value, because the same file can be declined by a bank, accepted at a poor rate by an alternative lender, and accepted at a better rate by a specialty broker-network lender if shopped correctly.
What compensates for a weak FICO
Lenders are pricing risk. A low FICO is one risk signal among many. Strong signals elsewhere can offset it materially.
1. High monthly revenue with clean bank statements
$50,000 plus monthly revenue with zero NSFs over the last 90 days, deposit count above 5 per month, and average daily balance above $5,000 can move a 600 FICO file from "decline" to "approve with reasonable terms." Underwriters know revenue is the primary repayment source; FICO is a secondary signal.
2. Long time in business
36 plus months in business with consistent operation is a strong offset. A 590 FICO with 5 years of business history reads differently than a 590 FICO with 9 months of history, even at the same revenue level. The longer track record signals the business has survived multiple cash flow cycles.
3. Collateral (turns unsecured into secured)
A secured LOC against business savings, equipment, or business real estate can sometimes approve at a FICO 30 to 50 points lower than unsecured pricing. The asset lowers the lender's loss-given-default, so they can price for lower risk on weaker credit. Trade-off: appraisal time adds 1 to 3 weeks.
4. Co-borrower or partner with stronger credit
If you have a co-owner with 700 plus FICO, most lenders will underwrite to the highest-FICO guarantor. This is the simplest fix when available. Both owners typically sign personal guarantees, so the partner is accepting real risk; have the conversation transparently.
What to do if your FICO is under 580
Below 580, the LOC market is mostly closed. The honest path forward is a different product:
- Merchant Cash Advance — underwrites primarily on business bank deposits, not personal FICO. Routinely funds at 500 to 580 FICO. Trade-off: higher cost (factor 1.30-1.49) and daily/weekly debits.
- Equipment Financing — equipment serves as collateral, so personal FICO is weighted less. Funds 540 plus FICO routinely. Only useful if the use is buying equipment.
- Revenue-Based Financing — MCA cousin with longer terms (12-36 months) and slightly better rates. Available 620 plus FICO with $25K plus monthly revenue.
- Wait and fix the FICO — a 30-60 day waiting period to move from 570 to 610 FICO can open the LOC market entirely. See the fix list below.
How to improve your FICO before applying
30-60 day fixes that move FICO 15-50 points
- Pay down personal credit card utilization below 30 percent of limit. The single highest-leverage fix. Often moves FICO 15-30 points within 30 days of the new statement.
- Dispute inaccurate items on your credit report. 50% of credit reports have at least one error. Free disputes via the three bureaus. Successful removals move FICO 10-30 points.
- Bring past-due accounts current. A single missed payment can drop FICO 60-90 points. Catching up does not erase the history but stops the bleeding.
- Avoid new credit inquiries for 90 days before applying. Hard inquiries each cost 5-10 points. Stacking 3+ inquiries in a 90-day window signals shopping distress to lenders.
- Do not close old credit cards. Counter-intuitive: closing a long-held card lowers your average account age, which lowers FICO. Keep them open at zero balance.
- Become an authorized user on someone else's good account. If a family member has a clean, long-held credit card and adds you as an authorized user, their history can boost your FICO within 30-60 days.
What we tell owners with weak FICO on our calls
The conversation usually goes like this: we look at the file, identify which 1 to 2 fixes would unlock the most product options, and either submit now (if the file is workable) or recommend a 30 to 60 day cleanup window before applying. About 30 percent of owners we talk to with sub-620 FICO are 60 days away from a materially better outcome if they fix utilization and inquiries first.
The expensive mistake is applying broadly with a weak file, getting denied by 5 lenders (each a hard pull), then trying again 90 days later with an even worse score. The broker model with one soft pull lets us tell you which lenders will actually say yes and which will not, without burning credit points in the process. See our broader bad-credit funding page for context across all 7 products.