Can I get a business loan after bankruptcy?
Yes — discharged Chapter 7 or 13 bankruptcies are typically approvable for MCAs after 12–24 months, alternative term loans after 24+ months, and SBA loans after 7+ years post-discharge. Open or active bankruptcies are a hard decline at virtually every lender.
Discharged vs. active is the first distinction
Bankruptcy on the credit report is one of the most-asked-about disqualifiers. The reality is more nuanced than 'declined' or 'approved.'
Approvability by product
By product:
- MCA — most lenders approve discharged BKs after 12–24 months with strong deposits ($20k+/month) and clean operating history since discharge
- Alternative line of credit — typically 24+ months post-discharge with 600+ FICO rebuild
- Alternative term loan — 24–36+ months post-discharge with strong financials
- Equipment financing — depends heavily on credit rebuild; 24+ months and 600+ FICO is the typical floor
- SBA 7(a) — 7+ years post-discharge is the conventional requirement; some lenders may consider less with strong recovery story
- Bank term loan — 7+ years and strong financials
The post-discharge rebuild matters more than the BK
Two structural notes: open or active bankruptcies are a hard decline almost everywhere, and a Chapter 7 discharge is generally treated more favorably than a Chapter 13 still in repayment. The credit rebuild post-discharge matters more than the BK itself — a 540 FICO with no post-BK derogatories beats a 620 FICO with new collections.
If this fits your situation, start at small business financing to compare the full lender lineup, or apply with ClearValue Lending directly — your file routes to the funding partners best matched to it.
Worked example — 18 months post-Chapter 7
A small contractor with a Chapter 7 discharged 18 months ago, current FICO 580, $22,000/month in business deposits, and no new derogatories post-discharge applies for a $40,000 MCA. Likely outcome: approvable at a 1.42–1.48 factor over 6–9 months. Twelve months later, same operator with FICO lifted to 640 and 30 months post-discharge — non-bank line of credit becomes a realistic option at materially better economics.
Don't apply during an active filing
Active or open bankruptcies are a hard decline at virtually every alternative lender. Wait for discharge, then start the rebuild — applying mid-filing burns inquiries and can complicate the case.
Sources
- Chapter 7 bankruptcy discharge eliminates most unsecured debts and is governed by 11 U.S.C. § 727 — after discharge, the business owner's personal liability for discharged debts is extinguished, but the bankruptcy remains on the personal credit report for 10 years. — U.S. Courts Bankruptcy Basics
- SBA SOP 50 10 requires lenders to evaluate any prior bankruptcies as part of character-and-credit underwriting; the conventional bar for 7(a) is a fully-discharged bankruptcy with demonstrated post-discharge creditworthiness — most lenders apply a 3–7 year minimum without explicit guidance. — SBA SOP 50 10
Key takeaways
- Discharged Chapter 7 or 13 bankruptcies are typically approvable for MCAs after 12–24 months.
- SBA loans conventionally require 7+ years post-discharge; bank term loans similar.
- The credit rebuild post-discharge matters more than the BK itself — clean history beats raw score.
- Open or active bankruptcies are a near-universal hard decline.
- Educational ranges only — actual approvability depends on lender, file, and current market.
- Related: Business Loans for Bad Credit — Complete Guide | FICO under 600 working capital options
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