micro loans for startup business with bad credit

Micro business loans

micro loan business planMicro business loans are small loans that are given to very small businesses. The average micro business loan is for around £5,000. The interest rate on a micro business loan is usually higher than a traditional small business loan because the risk is considered to be higher.

However, micro business loans can be a good option for businesses that cannot get traditional financing. There are many organisations that offer micro business loans, so it is important to do your research to find the best option for your business.

If you have 9 employees or less, you are technically classed as a microbusiness and are therefore likely viable to receive a microbusiness loan that could help to shape the future of your company, especially if growth is something you are looking and hoping to achieve.

As time goes on and different types of business start to become classified and grouped together, it is becoming easier to weigh up the financial options available to you.

Over the past few year’s microbusinesses have started to become recognised as an official business type with a set of needs unique to the way it is run on a daily basis.

What is a Micro Business Loan?

Micro business loans are variants of a small business loan, this type of finance is designed for sole traders and single person companies to give a boost to help with growth. Lenders intend that the borrowing is for small-scale businesses, as such the loan sums is lower amounts, usually no more that £25,000 usually no collateral is needed.  Due to this fact the requirements for application can be less stringent, but dependent on your status a personal guarantee is usually required.

Types of micro business loans

As we mentioned earlier, starting out small as solely responsible for your growth and borrowing you will want to cast a wide net if you are a sole trader of single entrepreneur looking for a business loan. The more options you look at, the easier it will be to find a solution to your cash flow problems to help your business. We understand that one loan will never suit all, so we’ve provided a solution that can help all types of business proprietors.

Not all the following business finance solutions providers are authorised and regulated by the financial conduct authority, therefore you should make your own investigations into this matter when searching for business loans for women.

1. Merchant Cash Advance

Merchant cash advances many many positives for businesses to take advantage of. Every business owner runs into the need for working capital from time to time. But where do you go to get it, especially when your bank won’t even consider your funding request?  There is a finance solution for businesses that take cards & debit card payments.

In fact, you could get cash from the sales you haven’t even made yet.  Turn tomorrow’s credit card & debit card sales into today’s cash flow. There is no faster, safer or easier way to get unsecured business funding. The merchant cash advance is classed as a short term working capital loan.

This is because they have a term time of a maximum 18 – 24 months. Your business must also accept card payments and be trading for six months. No accounts are needed for this scheme.

The amount of money you are offered from a lender will be based on your average monthly card sales. Typically the more money you make each month, the more money you will be able to borrow.

When it comes to repay the loan, business cash advance have flexible repayment terms are taken automatically as a small percentage of future card sales. For each customer card transaction your business processes using a designated terminal, a small amount will be automatically withdrawn, the are designed to be affordable.

This type of funding offers businesses an instant cash injection between £5,000 and £200,000. You can then comfortably and repay the money, using a small percentage of future customer card payments.

  • Access £5k to £200,000
  • Funding in as little as 48 hours
  • Get up to 150% of your monthly card turnover
  • Flexible repayments

2. Business Credit Cards

Business credit cards can be an appealing option for startups as well as more established businesses that want the flexibility of a credit line they can tap when needed. We cited earlier this you that Capital on tap allow a facility up to £100,000 with 56 days interest free on card purchases. They offer great interest rates from as low a 9.9% APR.

3. Crowdfunding

Ever wondered what Crowdfunding is? this type of funding option allows you raise money online from backers who are interested in supporting small businesses.

There are several types of crowdfunding available, including:

  • Commission-based: You offer a tangible commission for those who contribute to your campaign
  • Equity-based: You give others the opportunity to invest in your company, often by offering shares in your company.
  • Lending-based: You borrow money that will be repaid back.

Finding the right platform and crafting an effective campaign to win investors takes work, but the fact that you have business that just has hit a stumbling block may be appealing to some backers on these platforms as they can see a history unlike startups.

4. Invoice Factoring

Invoice factoring is a way for businesses to raise money by selling invoices to a factoring company at a discount. Factoring usually includes collections control services, and helps companies release cash from their debtor book. In order to use this type of business finance, you must deal with other businesses and not consumers.

  • Factoring is the ideal solution for businesses looking to save time chasing payments.
  • It releases up to 90% of the value of your unpaid invoices the moment you issue them to your customers.
  • You will have the full support of a dedicated relationship manager and access to your own online account to enable you to view your facility whenever you need to.
  • A discreet and friendly credit management team will collect payments on your behalf giving you more time to focus on the day-to-day running of your business.

5. Unsecured Business Loan

Unsecured business loans are a form of business financing that enables small businesses to fund their daily operations costs with a set interest rate. Term loans or business bank loans as the are called are often provided by a lender or high street banks and is usually secured against an asset, sometimes finance providers simply just ask for a personal guarantee if the borrowing is unsecured.

When business owners borrow money from a lender, a repayment plan with fixed costs is agreed as part of the lender’s terms of agreement. The money then gets paid back, with interest, in scheduled monthly payments over a pre-agreed repayment period.

A small business loan has a repayment term from 12 – 60 months.

There are two main types of small business loans in the UK:

  • Unsecured business loans
  • Secured business loans

How could a loan help my microbusiness?

Our micro business financing unsecured loans have aided thousands of businesses in the past, especially smaller sized firms that wanted to help with covering the costs of the following:

  • Hiring new members of staff
  • Getting out of financial distress
  • Stocking up on products or services
  • Purchasing new tech and other equipment
  • Increasing marketing budgets
  • and even more

Micro loans for start-up business

Many people have great business ideas but lack the financial resources to get their businesses off the ground. Fortunately, there are now a number of micro loan programs that can provide start-up capital for these individuals. Micro loans are typically much smaller than traditional bank loans, and they often come with more favorable interest rates and terms.

As a result, micro loans can be a great way for entrepreneurs to get the funding they need to turn their business dreams into reality. Of course, micro loans are not without risk; if a business fails, the borrowers will still be responsible for repaying the loan.

However, for many people, the potential rewards of starting their own business far outweigh the risks. With access to micro loans, more and more people are now able to realize their entrepreneurial ambitions.

Can I get a micro business loan with bad credit?

Credit score is one of the most important factors that lenders consider when evaluating a loan application. A high credit score indicates to lenders that you’re a responsible borrower who is likely to repay your loan on time. On the other hand, a low credit score can make it difficult to get approved for a loan – and if you are approved, you may end up paying a higher interest rate.

If you’re looking for a micro business loan but have bad credit, there are still options available to you. There are specialized lenders that offer loans to borrowers with bad credit, and there are also government-backed loan programs that may be able to help. Additionally, there are some things you can do to improve your chances of getting approved, such as building up your business’s cash reserves and providing collateral.

With bad credit, it may be more difficult to get approved for a micro business loan – but it’s not impossible. There are lenders and programs available that can help you get the financing you need to grow your business.

Is your business eligible for a microbusiness loan?

Micro business owners are required to pass the following criteria:

  • Registered and trading in the UK
  • Minimum monthly turnover of £5,000 for any business loan
  • For merchant cash advance, minimum monthly average card sales of £5,000
  • Trading for at least 6 months
  • Business owner / director is over the age of 18

Apply for a micro business loan

Step 1:

Click to apply for a quick quote and to find out how much you can borrow. You will be redirected to a page where we will ask for more information about your business, including:

  • The trading name of your microbusiness
  • The number of years you have been trading
  • Your microbusiness’ average monthly turnover
  • The amount you want to borrow

Step 2:

The next step involves disclosing your personal details, please be ready to tell us:

  • Your title, first name and surname
  • Position in the business
  • Registered office address if registered in England and Wales
  • Company registration number
  • Contact details

Step 3:

Carefully read through the terms and conditions and click ‘get my quote’. From here your application gets reviewed by one of our approved business finance suppliers, who will help find the best lender for your micro business loan.

Step 4:

Please expect a call and email from one of our dedicated account team members to discuss your business loan agreement.

Step 5:

Carefully read through the agreement and sign the relevant documentation ready to return to PDQ Funding. From there you will be able to access the funds in your account in just 24 hours.


What is Micro Business Loan?

A micro business loan is a variation of a small business loan, designed for companies which employ less than nine persons.

Getting a Micro Business Loan

If you considering a micro business loan the next step is the application. We take into account a variety of factors to decide if each business is eligible for micro business financing.

Why choose PDQ Funding for a Microbusiness Loan?

As a leading lender in the microbusiness loan space we recognise that it can be difficult for microbusinesses to find financing for their business to develop and grow. Simply apply by using our online form, it is quick and simple, we also do not charge any upfront fees for applying.

Lee Jones Profile Image
Business Finance Expert at PDQ Funding

Lee Jones is a seasoned Business Finance Specialist with over two decades of invaluable experience in the financial sector. With a keen eye for market trends and a passion for helping businesses thrive, Lee has become a trusted advisor to countless organizations seeking to navigate the complexities of finance.