Can I Start A Business With Bad Personal Credit?

Entrepreneurship is an exciting frontier, and certainly not one for the faint of heart. If you think you have what it takes to venture into this world, then you should be prepared that you will have to secure the material funds for your great idea. But, what if in the past you hit a few bumps in the road? Can you start a business with bad personal credit? Here are some things to consider:

Starting a Business doesn’t have to Cost a Lot of Money

If you’re creative and resourceful, you can probably come up with a lot of ways to cut costs in the very beginning, until your business picks up enough to fund some expansion. For example, you don’t have to purchase new supplies if you can find them used, you may be able to run your business out of a home (or virtual) office in lieu of a storefront, and there are places where you can rent business equipment until you can afford to purchase it.

Angel Investors

If you have a brilliant business idea and can make a compelling argument for its viability (generally through a well-conceived and thoroughly executed business plan), then you may be able to convince an angel investor to fund either all or part of your startup. Angel investors are private parties who put their money into business ventures that they believe will be successful. Oftentimes, business owners give angel investors some stake in the business (either in the form of a limited partnership or return on investment) in exchange for the startup funds.

Credit Repair through Business Financing

There are credit cards and loan programs specifically for people with bad credit. You can take advantage of these when financing your business startup in order to fund your business and repair your credit at the same time. However, these options should only be used with prudence, as they typically carry extremely high interest rates. As a good rule of thumb, credit cards and high-interest personal loans should comprise less than 25 percent of your business funding.


This is a relatively new industry that is providing business owners of all types with money to start and grow a business. A growing number of microlenders also provide loans to individuals with less than perfect credit (albeit with higher interest rates). Search the web to find a wide array of microlending organizations and be sure to shop around, as they each offer their own unique loan programs and terms.

If you have bad personal credit, then you should be relieved to learn that your credit history doesn’t necessarily have to hold you back from starting your business. There are some great resources, like, you can use to learn more about repair your personal credit, too. You may have to pay higher interest rates, and you will certainly have to be resourceful, but it is possible to build a business even when your credit needs some rebuilding.

Image credit: photosteve101/Flickr

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