Getting a Business Loan After Bankruptcy

Rebuilding after bankruptcy isn’t easy—but it is possible. If you're researching how to get a business loan after bankruptcy, you're already taking the first step toward financial recovery. Whether your bankruptcy was caused by medical bills, the pandemic, poor partnerships, slow sales, or simply a tough season of life, you’re not alone. Millions of Americans file for bankruptcy each year, and many of them go on to launch successful businesses and secure new funding.

This comprehensive, expert-level guide explains exactly how to qualify for business funding after bankruptcy, what lenders look for, which financing options are most accessible, and what steps you can take right now to dramatically increase your approval odds.

By the end, you’ll fully understand your loan options—and you’ll feel empowered to take your next steps confidently.

Why This Topic Matters in 2025: Bankruptcy Rates & Small Business Funding Trends

Bankruptcy filings surged between 2023 and 2025 due to rising interest rates, inflation, and decreased consumer spending. As a result, many new and established entrepreneurs are wondering:

• “Can I get a business loan after bankruptcy?”

• “Do lenders still approve borrowers with bad credit?”

• “Is funding possible for startups after bankruptcy?”

The good news: YES. There are more funding options than ever before—and lenders have become increasingly flexible, especially in the online lending and alternative lending markets.

Can You Get a Business Loan After Bankruptcy? (Yes—Here’s How)

The simple answer is yes—you can absolutely get a business loan after bankruptcy. Whether you filed Chapter 7, Chapter 11, or Chapter 13, dozens of lenders still offer funding based on:

• Business revenue

• Cash flow

• Collateral

• Time since discharge

• Improvements in credit

• Documented financial stability

Bankruptcy makes the process more challenging, but it doesn’t eliminate your options. Many lenders specialize in "credit recovery" borrowers, and some programs are designed specifically for entrepreneurs rebuilding after financial hardship.

How Long After Bankruptcy Can You Get a Business Loan?

Each bankruptcy type has different waiting periods before most lenders will consider you.

Chapter 7 – Liquidation Bankruptcy

• Typical waiting period: 1–2 years after discharge

• Many alternative lenders approve earlier depending on revenue

Chapter 13 – Reorganization Bankruptcy

• You can sometimes obtain a business loan during the repayment plan, but you will need trustee approval

• Easier approval once the plan is completed

Chapter 11 – Business Reorganization

• Waiting period: 6–12 months after reorganization

• Faster approval if the business has demonstrated stable cash flow

Dismissed Bankruptcy

A dismissal indicates failure to complete the bankruptcy, which can look riskier than a discharge. Many lenders impose longer waiting periods.

How Lenders Evaluate Borrowers After Bankruptcy

To increase your chances of approval, it helps to understand what lenders look at.

1. Time Since Bankruptcy

The older your bankruptcy, the lower your perceived risk.

2. Personal Credit Score

Although bankruptcy damages personal credit, lenders analyze your:

• Post-bankruptcy payments

• Credit utilization

• Open accounts

• Length of credit history

3. Business Credit Score

Many borrowers forget that business credit is separate from personal credit. Lenders review:

• Experian Business

• D&B PAYDEX

• Equifax Small Business

4. Business Financial Health

Lenders will examine:

• Monthly revenue

• Annual gross income

• Cash flow consistency

• Profitability

• Existing business debt

5. Collateral

Bankruptcy reduces trust, so lenders may require:

• Equipment

• Vehicles

• Accounts receivable

• Inventory

• Real estate

6. Business Age

The odds of approval increase dramatically for businesses older than two years.

Types of Business Loans Available After Bankruptcy (From Easiest to Hardest)

Below is the full list of loan types that are accessible even with a past bankruptcy.

1. Online Term Loans (Most Accessible)

Online lenders rely heavily on cash flow—not credit score.

Best for: Borrowers with steady revenue
Approval time: 24 hours to a few days

Pros:

• Minimal credit requirements

• No collateral needed

• Fast funding

Cons:

• Higher interest rates

• Shorter repayment terms

2. Merchant Cash Advances (MCAs)

MCAs offer financing based on daily credit card sales. They rarely deny borrowers because of bankruptcy.

Pros:

• Fast approval

• No credit score requirements

• Easy qualification

Cons:

• Expensive

• Daily or weekly withdrawals

3. Business Lines of Credit

Great for recurring or flexible expenses.

Pros:

• Borrow only what you need

• Creates a financial cushion

Cons:

• Lower limits if you have bad credit

4. Equipment Financing

Equipment serves as collateral, lowering lender risk.

Pros:

• Bankruptcy-friendly

• Competitive rates

• Builds business credit

Cons:

• Equipment can be repossessed

5. Microloans

Nonprofits, community lenders, and the SBA Microloan Program are designed to help borrowers rebuilding credit.

Pros:

• Lower rates

• Flexible qualification

• Borrow up to $50,000

Cons:

• Smaller amounts

6. Invoice Financing

For businesses that invoice clients.

Pros:

• Borrow based on your invoices

• Low credit requirements

Cons:

• Only works for B2B businesses

7. SBA Loans (YES, Even After Bankruptcy)

SBA loans require stronger credit and more time after discharge, but many borrowers qualify within 1–3 years.

Pros:

• Low interest rates

• Long repayment terms

Cons:

• Strict requirements

• Lengthy application process

The #1 Key to Post-Bankruptcy Loan Approval: Rebuilding Your Credit

While some lenders approve borrowers immediately after discharge, the best loan programs require stronger credit. Here’s how to boost your credit quickly and effectively.

How to Rebuild Your Credit After Bankruptcy (Fast + Proven)

1. Review Your Credit Reports

Dispute errors immediately.

2. Make On-Time Payments

35% of your FICO score depends on payment history.

3. Keep Utilization Low

Aim for under 10–30%.

4. Open New Positive Accounts

These help replace the negative bankruptcy entries.

Options include:

• Secured credit cards

• Credit-builder loans

• Store credit accounts

• Net-30 vendor accounts

5. Add Authorized User Tradelines

Piggyback on someone else’s clean credit history (only with permission).

6. Avoid New Debt You Cannot Manage

Post-bankruptcy lenders monitor patterns.

Strengthen Your Business Profile: The Part Most People Skip

Even if your personal credit isn’t perfect, your business credit can be strong. This is especially important because some lenders rely on business credit instead of personal credit.

Ways to Build Business Credit Quickly

• Register your business (LLC, EIN)

• Open a business bank account

• Apply for net-30 accounts

• Pay vendors early

• Use business credit monitoring tools 

Strong business credit can outweigh personal bankruptcy for many lenders.

Documentation You’ll Need for a Business Loan After Bankruptcy

Being organized helps lenders feel confident in approving you. Gather:

• Bankruptcy discharge papers

• Personal identification

• Last 3–12 months of business bank statements

• Profit and loss statements

• Personal tax returns

• Business tax returns

• Detailed business plan

• Balance sheet

• Cash flow projections

Lenders reward borrowers who appear well-prepared and financially stable.

Create a Business Plan That Compensates for Your Bankruptcy

Your business plan should answer the lender’s biggest question:

“What’s different now?”

Use your plan to show:

• How you’ve corrected past financial issues

• Why your business is stable today

• How the loan will generate additional revenue

• Your financial projections

• Your repayment strategy

This builds lender confidence—even more than credit scores do.

Quick Steps to Getting a Business Loan After Bankruptcy

1. Check credit.
2. Rebuild positive credit lines.
3. Boost business revenue.
4. Prepare financial documents.
5. Compare lenders.
6. Apply with strong business plan.
7. Accept loan terms.

What Interest Rates Look Like After Bankruptcy

Interest rates depend on:

• Time since discharge

• Lender type

• Business revenue

• Collateral availability

Typical ranges:

• Online loans: 12%–45%

• Microloans: 6%–18%

• Equipment financing: 6%–30%

• SBA loans: 6%–11%

• MCAs: 30%–100%+ cost of capital

Rates decrease dramatically as your credit improves.

Common Mistakes to Avoid After Bankruptcy When Applying for Loans

Avoid these pitfalls:

• Applying to too many lenders → lowers your score

• Taking high-interest loans without reviewing terms

• Not rebuilding credit first

• Hiding bankruptcy details

• Inconsistent bank activity

• Not having a business plan

• Missing documentation

• Letting personal and business finances mix

Frequently Asked Questions About Getting a Business Loan After Bankruptcy

Will bankruptcy show up forever?

No. Chapter 7 stays for 10 years; Chapter 13 stays for 7 years.

Should I tell lenders about my bankruptcy?

Yes—it shows up anyway. Transparency helps you gain trust.

Can I get a business loan without a credit check?

Yes. Merchant cash advances and some revenue-based lenders do not require credit checks.

Is bankruptcy bad for business credit?

Not necessarily—many bankruptcies only affect personal credit.

Can I get a startup loan after bankruptcy?

Yes, but microloans, equipment financing, or personal investments may be required at first.

Your Step-by-Step Roadmap to Getting Approved After Bankruptcy

Here’s your success blueprint:

1. Rebuild credit for at least 3–12 months.

2. Keep your business bank account active and healthy.

3. Boost revenue consistency.

4. Build trust with lenders through transparency.

5. Start with microloans or equipment financing.

6. Move on to lines of credit and online term loans.

7. Eventually qualify for low-rate SBA loans.

This roadmap has helped thousands of entrepreneurs rebuild successfully.

Conclusion: Bankruptcy Doesn’t Define You—Your Next Steps Do

Getting a business loan after bankruptcy is absolutely possible when you know where to look, what lenders require, and how to present your financial story. With the right preparation, you can rebuild your credit, strengthen your business finances, and secure the capital needed to grow—even after financial hardship.

Remember: Bankruptcy is a reset, not the end. Your entrepreneurial future is still wide open.

Ready to rebuild and secure funding after bankruptcy? Contact us and take the next step toward growing your business with confidence.