Best Bad Credit Business Loan lenders in South Africa for 2025

Business Loans

Lula: Best for fast approvals and flexible repayment

Interest (APR)

2-6% per mo

Loan Amount

R10k-R5m

Loan Term

6-12 mo

Apply on partner site

Pros

Cons

Overview

Lula is a well-established South African alternative lender that provides fast and accessible business loans, even to enterprises with lower credit scores. The company offers funding solutions tailored for small and medium-sized enterprises (SMEs), assisting them in managing cash flow, purchasing inventory, and investing in growth. Their swift online application process and rapid turnaround render it ideal for businesses requiring urgent funding.

What sets Lula apart is its flexible repayment options and unsecured loan offerings. Since credit scores are not the sole determining factor for loan approval, Lula assesses other business performance indicators, such as revenue and cash flow. This makes it a viable option for SMEs struggling to secure loans from traditional banks.

Key Facts

  • Loan Amounts: Lula offers business loans ranging from R10,000 to R5 million to businesses of all sizes.
  • Fast Funding: Applications may be approved within minutes, with funds released within 24 hours, ensuring swift access to capital.
  • Flexible Repayment Terms: Repayment terms are available for either 6 or 12 months, and there are no penalties for early repayment, enabling businesses to pay off their loans sooner.
  • Unsecured Loans: No collateral is necessary, allowing SMEs with limited assets to qualify more easily.
  • Transparent Pricing: Lula employs a straightforward and transparent fee structure, with monthly costs varying from 2% to 6% of the loan amount, depending on the selected repayment plan.
  • Minimal Documentation: The application process is entirely online and takes under 10 minutes. It only requires basic business details and financial records.

Known qualification & document requirements

  • Business must be operational for at least six months
  • Annual revenue of at least R500,000​
  • Valid South African business registration
  • Recent bank statements required
  • No collateral or audited financials are required

Fees

Lula does not charge initiation fees or monthly admin fees, unlike many traditional lenders. Their cost structure is transparent, with fees ranging from 2% to 6% of the loan amount, depending on the loan plan chosen, for the first few months. After that, a fixed 2% fee is charged for the remaining months of the term. Additionally, there are no early repayment penalties, allowing businesses to save on costs if they repay earlier than expected.

Time to receive funds

24h after application approval

Illustrative Example

Loan Amount: R100,000
Repayment Term: 12 months
Monthly Fee (First 4 months): 6%
Monthly Fee (Remaining 8 months): 2%
Monthly Instalment: R10,500.00
Total Cost of Credit: R26,000 (fees over 12 months)
Total Repayment: R126,000

*Please note this is just an illustrative example of what it would cost you. Actual fees and rates may vary based on your specific loan amount and repayment plan. For an accurate quote, we recommend applying directly with Lula.

Business Loans

Bridgement: Best for simple, transparent fees and flexible funding

Interest (APR)

From 1.7% per mo

Loan Amount

R20k-R5m

Loan Term

1-12 mo

Apply on partner site

Pros

Cons

Overview

Bridgement is a South African fintech lender that provides fast, flexible funding solutions for SMEs, including those with limited or poor credit histories. Their business loans are designed to be straightforward and transparent. They offer a pay-as-you-use model, where businesses only pay for the funds they use.

Bridgement stands out for its no-hidden fees policy and highly flexible repayment options, enabling businesses to manage their cash flow effectively. Unlike traditional lenders, it emphasises business performance more than credit scores, making it an excellent choice for SMEs with weaker credit profiles.

Key Facts

  • Loan Amounts: R20,000 to R5 million, making it suitable for small and medium-sized businesses.
  • Fast Funding: Loan approvals within 24 hours, with funds disbursed soon after.
  • Flexible Repayment Terms: Repayment periods vary from 1 to 12 months, offering discounts for early settlement.
  • No Hidden Fees: Bridgement imposes a fixed finance fee without origination, administrative, or hidden charges.
  • Pay-as-You-Use Model: You only pay for the funds utilised, making it perfect for businesses with variable cash flow.
  • Minimal Documentation: Requires little paperwork and a swift online application.

Known qualification & document requirements

  • Registered business in South Africa
  • Annual turnover of at least R500,000
  • Trading history of at least 6 months
  • Connect accounting software or provide bank statements
  • Valid business registration documents
  • No personal collateral is required

Fees

Bridgement does not charge initiation fees or monthly admin fees. Instead, it operates with a simple fee structure: a single fixed fee starting at 1.7% per month is charged on the amount advanced, with no hidden costs. You are only charged if you use the facility, and there are no penalties for early repayment, meaning you can save by paying off your loan early.

Time to receive funds

24-48h after application approval

Illustrative Example

Loan Amount: R100,000
Repayment Terms: 6 months
Interest Rate: 1.7% per month (fixed fee)
Monthly Instalment: R18,333.33
Total Cost of Credit: R10,000 (fixed fee)
Total Repayment: R110,000

*Please note this is just an illustrative example of what it could cost you. Your interest rate and repayment terms may vary based on your business profile and risk assessment. For an accurate quote, we recommend applying directly with Bridgement.

Business Loans

ProfitShare Partners: Best for contract-based financing

Interest (APR)

N/A

Loan Amount

R250k-R5m

Loan Term

N/A

Apply on partner site

Pros

Cons

Overview

ProfitShare Partners is a dynamic South African financial services provider specialising in short-term funding solutions for small and medium-sized enterprises (SMEs). Established to bridge the gap in access to working capital, ProfitShare Partners focuses on enabling businesses to secure the funds they need without requiring collateral or extensive credit history. Their unique approach to financing ensures that you can access the necessary capital to fulfil purchase orders, complete contracts, or expand operations.

With a reputation for fast approvals and flexibility, ProfitShare Partners is an ideal choice for businesses looking for business loans. Their funding solutions are designed to align with your cash flow, providing tailored repayment options that work in tandem with your business performance. Their customer-centric model has made them a trusted partner for SMEs across various industries in South Africa.

Key Facts

  • Loan Amounts: ProfitShare Partners offers funding ranging from R250,000 to R5 million, providing businesses with significant capital to complete large contracts.
  • No Traditional Loan Structure: Instead of charging interest, ProfitShare Partners operates as a short-term joint venture partner, sharing in the profit of the transaction.
  • Fast Funding: Applications are processed and approved within 24 to 48 hours, giving businesses quick access to funds.
  • No Financials or Security Required: Businesses do not need to provide financial statements or collateral to qualify for funding, which is ideal for younger companies without established credit histories.
  • Focus on Contract Financing: ProfitShare Partners specializes in purchase order, contract, and invoice financing, helping businesses manage cash flow while waiting for client payments.

Known qualification & document requirements

  • South African-registered business with the Companies and Intellectual Property Commission (CIPC)
  • Valid purchase order or contract from a credible corporate or government entity
  • Six months of business bank statements
  • Proof of business address

Fees

ProfitShare Partners does not charge initiation fees or monthly admin fees. Instead, they operate on a profit-sharing model, where the repayment is based on a percentage of profits made from the funded project. This structure helps businesses avoid the burden of traditional loan interest and fees.

Time to receive funds

24-48 hours after application approval

Illustrative Example

Loan Amount: R500,000
Repayment Terms: Linked to the completion of a project (no fixed term)
Profit Share Fee: 10% of project profit (agreed upon upfront)
Total Cost of Loan: R50,000 (profit share fee)
Total Repayment: R550,000 (includes loan and profit share fee)

*Please note this is just an illustrative example. Actual profit share, repayment terms, and loan amount will vary based on the specifics of your project or contract. To get an accurate quote, we recommend applying directly with ProfitShare Partners.

Business Loans

Cash Flow Capital: Best for short-term loans with daily repayments

Interest (APR)

2.5-4% per mo

Loan Amount

R50k-R2m

Loan Term

4 to 12 mo

Apply on partner site

Pros

Cons

Overview

Founded in 2014, Cash Flow Capital provides alternative financing solutions tailored specifically for small and medium-sized enterprises (SMEs) in South Africa. They specialize in offering fast and flexible business loans, including working capital and asset finance, designed to meet the cash flow needs of growing businesses. Unlike traditional lenders, Cash Flow Capital simplifies the lending process with a quick, 5-minute online application, and funds can be disbursed within 24 hours of approval. Their primary focus is supporting SMEs across industries like retail, FMCG, and hospitality, helping them scale without the long delays or complexities often associated with traditional bank loans.

Cash Flow Capital has made significant strides in the SME lending market by providing more than R2 billion in funding to over 3,700 businesses since its inception. Their proprietary credit model ensures fast pre-approvals, with repayment terms ranging from 4 to 12 months. The company offers daily or weekly repayment options, providing greater flexibility to businesses with fluctuating cash flow needs. Cash Flow Capital’s mission is to empower small businesses by providing accessible capital to fuel growth, helping entrepreneurs achieve their next level of success.

Key Facts

  • Loan Amount: Cash Flow Capital offers business loans ranging from R50,000 to R2 million, tailored to your business needs.
  • Repayment Terms: Flexible repayment terms ranging from 4 to 12 months, with daily or weekly options.
  • Fast Funding: Get approved within hours and receive funding within 24 to 48 hours after approval.
  • No Collateral Required: Loans are unsecured, so no collateral is needed to access funding.
  • Early Settlement Discounts: Cash Flow Capital offers discounts for early settlement, helping you save on overall costs.
  • Quick Application Process: Applications take less than 5 minutes to complete, streamlining the process.

Known qualification & document requirements

  • A profit margin of at least 10%
  • Minimum 6 months in business
  • Monthly turnover of at least R300,000
  • 3 months recent bank statements required
  • The most recent financial report of the company
  • No collateral is required, but proof of revenue is essential

Fees

Cash Flow Capital does not charge initiation fees or monthly admin fees for their business loans. Instead, they offer a straightforward and transparent cost structure with no hidden fees. The total loan cost is based on your business’s risk profile and repayment plan, and early settlement discounts are available to help save on overall repayment costs.

Time to receive funds

24-48 after application approval

Illustrative Example

Loan Amount: R100,000
Repayment Terms: 6 months
Interest Rate: 3% per month (example rate based on risk profile)
Monthly Instalment: R19,666.67
Total Cost of Credit: R18,000 (interest over 6 months)
Total Repayment: R118,000

*Please note this is just an illustrative example of what it could cost you. Your interest rate and repayment terms may vary based on your business profile. To get an accurate quote, we recommend applying directly with Cash Flow Capital.

Business Loans

GroWise Capital: Best for short-term unsecured funding for SMEs

Interest (APR)

N/A

Loan Amount

R15k-R5m

Loan Term

6 w-12 mo

Apply on partner site

Pros

Cons

Overview

GroWise Capital is a tech-enabled, alternative business lender based in South Africa, specialising in providing fast, flexible funding solutions to small and medium-sized enterprises (SMEs). Established in 2019, GroWise Capital aims to address SMEs’ funding gaps by offering tailored financial support that can be accessed quickly, often within hours. Their products range from cash to merchant stock advances, with funding between R15,000 and R5 million and repayment terms of up to 12 months. The company’s technology ensures a smooth application process with minimal paperwork, making it a convenient option for businesses looking for fast, no-nonsense funding.

What sets GroWise Capital apart is its focus on financial inclusion and the empowerment of entrepreneurs. The company provides funding without requiring collateral and offers flexible repayment options, including daily, weekly, or monthly payments based on the business’s cash flow. GroWise Capital is committed to helping companies grow by offering customised financing to their specific needs, ensuring that entrepreneurs can access the resources they need to thrive in a competitive market.

Key Facts

  • Loan Amounts: Growise Capital offers business loans ranging from R15,000 to R5 million.
  • Repayment Terms: The repayment periods vary between 6 weeks and 12 months.
  • Interest Rates: Growise Capital uses a fixed finance fee model, tailored to your business’s risk profile and repayment terms, meaning no traditional interest rates apply.
  • Unsecured Funding: Growise provides unsecured business loans, meaning no collateral is required.
  • Fast Funding: Loan approvals and disbursals are typically completed within hours.
  • Tailored Repayment Options: You can choose flexible repayment options, with payments scheduled daily, weekly, or monthly based on your cash flow.
  • Simple Application Process: The online application process takes under 4 minutes and requires minimal paperwork.

Known qualification & document requirements

  • Minimum 6 months in operation
  • CIPC registered business​
  • Average monthly turnover of at least R50,000
  • Submit 6 months’ bank statements
  • Valid ID of the business owner(s)​
  • No collateral is required, but business revenue is essential

Fees

Growise Capital does not charge initiation fees or monthly admin fees for their business loans. Instead, they apply a fixed finance fee, which is added to the cash advance amount and repaid over the loan term. This fee is determined based on the business’s risk profile, and there are no early settlement penalties. This transparent fee structure eliminates hidden costs, making it easier for businesses to manage their repayments.

Time to receive funds

Within hours of application approval

Illustrative Example

Loan Amount: R100,000
Repayment Term: 6 months
Fixed Finance Fee: 10% of loan amount (approximate)
Monthly Instalment: R18,333.33
Total Cost of Credit: R10,000 (finance fee)
Total Repayment: R110,000

*Please note this is just an illustrative example of what it could cost you. The actual finance fee and repayment terms may vary based on your business profile and risk assessment. To get an accurate quote, we recommend applying directly with Growise Capital.

Compare bad credit business loan rates with Fundrate's top picks

Lender

Best For

Est. Apr

Loan Amount

Loan Term

Lula

Fast approvals and flexible repayment

2-6% per month

R10k-R5m

6-12 months

GroWise Capital

Short-term unsecured funding for SMEs

N/A

R15k-R5m

6 weeks-12 months

Cash Flow Capital

Short-term loans with daily repayments

2.5-4% per month

R50k-R2m

4-12 months

Bridgement

Simple, transparent fees and flexible funding

From 1.7% per month

R20k-R5m

1-12 months

ProfitShare Partners

Contract-based financing

N/A

R250k-R5m

N/A

Pros and cons of bad credit business loans

While bad credit business loans can provide crucial funding, they aren’t ideal for every business. Weigh the pros and cons before committing.

What is a Bad Credit Business Loan?

A bad credit business loan is a financing option for businesses that find it difficult to secure traditional loans due to a poor credit history or lack of a credit record. These loans offer SMEs a means to access funding despite a low credit score. Lenders providing bad credit business loans concentrate on business cash flow, revenue stability, and overall financial health rather than solely on credit scores.

How Does a Bad Credit Business Loan Work?

Bad credit business loans function similarly to traditional loans but feature more flexible eligibility criteria. Rather than relying solely on credit scores, lenders evaluate factors such as revenue history, business age, and industry risk. Some lenders may require collateral, whereas others provide unsecured options at higher interest rates. Loan terms generally range from 3 months to 5 years, with repayment structures including fixed instalments, revenue-based repayments, or short-term advances.

Loan Use Cases

Businesses may use bad credit loans for various purposes, including:

  • Working capital – Maintain daily cash flow for expenses like salaries, rent, and utilities.
  • Equipment purchases – Acquire essential machinery, tools, or technology to enhance operations.
  • Inventory financing – Secure stock or raw materials to meet demand and grow revenue.
  • Business expansion – Fund renovations, open new locations, or hire additional staff for growth.

Loan Eligibility Factors

Lenders consider several factors when evaluating applications for bad credit business loans:

  • Minimum revenue requirements – Lenders may require a consistent revenue stream.
  • Time in business – Typically, lenders prefer businesses operating for at least six months.
  • Credit score considerations – A low credit score is acceptable, but other financial factors must be strong.
  • Industry type – Some lenders restrict funding to specific sectors.

Credit Score Impact and How to Improve It

A low credit score can affect loan terms, leading to higher interest rates or limited borrowing amounts. To improve your credit score:

  • Pay existing debts on time.
  • Reduce credit utilisation.
  • Establish strong financial management practices.
  • Regularly monitor and correct credit report errors.

Interest Rates Breakdown

Interest rates for bad credit business loans vary based on lender risk assessment:

  • Typical interest rate ranges – Between 15% and 40% APR.
  • Fixed vs. variable rates – Some lenders offer fixed payments, while others adjust rates based on revenue.
  • Factors influencing rates – Business revenue, loan amount, industry risk, and repayment history.

Repayment Terms and Flexibility

Repayment options for bad credit business loans depend on the lender:

  • Fixed instalments – Regular monthly repayments.
  • Revenue-based repayment – A percentage of daily or weekly revenue.
  • Early repayment options – Some lenders allow prepayment without penalties.

Comparison with Other Business Loan Types

Bad credit business loans differ from other financing options:

  • Vs. traditional business loans – More accessible but with higher interest rates.
  • Vs. merchant cash advances – MCAs are repaid via card sales, while bad credit loans use fixed or revenue-based repayments.
  • Vs. invoice factoring – Factoring uses unpaid invoices as collateral, whereas bad credit loans do not.

Regulatory and Legal Considerations in South Africa

Borrowers should understand the legal aspects of business loans:

  • National Credit Act (NCA) – Protects businesses from predatory lending.
  • Transparency requirements – Lenders must disclose all fees and interest rates upfront.
  • Legal protections – Businesses can negotiate repayment terms in financial distress.

Alternatives to Bad Credit Business Loans

If a bad credit loan isn’t the best fit, consider:

  • Business lines of credit – Flexible borrowing options with revolving credit.
  • Merchant cash advances – Loans repaid through card transactions.
  • Government funding – SEFA and other agencies offer financial support.

How to Apply for a Bad Credit Business Loan

Follow these steps to apply:

  1. Assess eligibility – Check revenue and financial stability.
  2. Gather documents – Business registration, bank statements, and financial reports.
  3. Apply – Online or through a lender’s branch.
  4. Undergo credit and risk assessment – Lenders review business performance.
  5. Receive funds – Disbursement time varies by lender.

FAQs

Depending on lender risk assessment, interest rates range from 15% to 40%.

Approval times vary but typically range from 24 hours to a few days.

Typical requirements include bank statements, proof of revenue, and business registration documents.

Yes, some lenders accept businesses as young as six months.

Most industries qualify, but high-risk sectors may face stricter terms.

Depending on revenue and lender, loan amounts range from R10,000 to R5 million.

Repayment options include fixed instalments, revenue-based payments, or daily/weekly deductions.

Some lenders allow early repayment with no penalties, while others charge fees.

Yes, but lenders prioritise business cash flow and revenue over personal credit scores.

Banks typically offer lower rates but have stricter requirements, while alternative lenders provide flexible access with higher costs.

How we choose our best business loan lenders

To select the best loans, Fundrate evaluates the most prominent lenders in South Africa. Each lender was ranked focusing on four main categories:

Affordability

This section of the scoring evaluates interest rates, penalties, and fees. Lower rates and fees, along with fewer penalties, contribute to a higher score. Lenders that offer rate discounts, grace periods, and the option to change the due date receive bonus points.

Availability

This category considers factors such as minimum loan amounts, number of repayment terms, eligibility requirements, the option to apply with a co-borrower or co-signer, and the loan turnaround time.

Customer experience

This category includes customer service hours, the availability of online applications, online account access, and mobile apps.

Transparency

For this factor, we assess how clearly information is presented to borrowers on the lender’s website. This includes details on credit requirements, rates, fees, and the availability of prequalification.