Alternative lenders and traditional lenders specializing in bad credit provide these types of loans for businesses:

• Term loans. Term loans are lump sums of cash you borrow from banks and pay back, with fees, over a certain period of time. You can choose from secured or unsecured business loans, but secured business loans require collateral, such as equipment. Unsecured business loans primarily rely on your credit but may need a personal guarantee.

• Lines of credit. Business lines of credit are similar to business credit cards can help when you're in a cash flow crunch. With a business line of credit lender approves you for a pool of funds, also known as a revolving line of credit. You will pay interest only on the portion of money that you borrow from your business line of credit.

• Equipment loans. With equipment loans, lenders typically finance 80% to 100% of the cost of your equipment. The equipment acts as collateral for the loan. Alternative lenders may be more likely than traditional lenders to offer equipment loans to businesses with poor credit.

• Invoice financing or factoring. If your business struggles with cash flow issues because customers do not pay their balances in full, invoice financing – or invoice factoring, which is closely related – is an option. With invoice financing, you sell your invoices to a lender at a discount and receive an advance on them. With invoice factoring, you hand control of the invoices and collections to a factoring company.

• Merchant cash advances. A merchant cash advance is an advance on your firm's future sales and can deliver quick access to capital. You'll often repay the advance as a percentage of your daily credit card and debit card receipts, plus fees.

Getting a business loan means preparing a solid application, especially when you have bad credit. Before you apply, take these steps to help qualify for a business loan with bad credit:

• Improve your personal credit. Present your personal finances as attractively as possible, recommends S. Michael Sury lecturer in finance in the McCombs School of Business at the University of Texas at Austin. If you have a bad personal credit score, you can get a higher credit score by making on-time payments, dealing with delinquencies and paying down balances when possible. Dispute and fix errors, such as incorrect balances.

• Build your business credit score. If you want to establish a business credit history, consider opening small-business credit products, such as a business credit card or line of credit. If you need to improve your business credit score instead, the steps are similar to how you would rebuild your personal credit score, says Rod Griffin, senior director of public education and advocacy for Experian, one of the three major consumer credit bureaus. Catch up on any late loan payments and make sure your vendors are paid on time to give your business a higher credit score.

• Write a solid business plan. Sury recommends a well-thought-out business plan with a mission and strategy to boost your odds of securing financing. Your business plan should include projected financial statements. If you have a strong management team, you can highlight its background, experience and creditworthiness.

• Find other ways to boost your creditworthiness. If you have a bad credit score, you can improve it by asking for reference letters indicating timely payments from personal and business creditors as well as vendors.

When you're ready to start a business loan application, make sure you can answer these questions:

• Why do you need this loan?

• How do you plan to use the loan proceeds?

• What collateral, such as business equipment or other assets, will you pledge?

• Has your business applied for other loans?

You will likely need to provide personal information, such as your Social Security number, home address and phone number, along with your resume. Any sound loan program will also require your business and personal financial and legal documents, such as articles of incorporation.