Many business lenders require a personal credit check, which can be a problem for small business owners with bad credit. However, it is possible to find a few lenders that don’t do a credit check at all. If you’re looking for a way to fund your business without checking your credit score, here are some options to consider:
Startup Business Loans
When starting up a new business, there are a lot of expenses to cover. Ideally, you’ll have great credit and a long history of income generation to qualify for a traditional business loan from a brick-and-mortar bank. However, this isn’t always the case. There are a few lenders that offer startup business loans with no credit checks. These companies may look at other factors, such as the company’s cash flow or the founder’s net worth.
Many businesses need to purchase equipment or furniture, and some lenders don’t check credit at all. Instead, these lenders may look at the company’s sales records or bank statements to see if it has enough consistent deposits. They might also require a down payment or ask for collateral to secure the loan. In this case, the lender would hold the equipment or furniture as security against the loan amount if you default.
Many payment processing and credit card providers have jumped into the business financing space, offering lines of credit based on your invoices. These lenders often don’t check your credit at all, but will look at your invoicing and sales history to determine how much you can borrow. Invoice financing is available through companies like Square, Payability and Fundbox.
Many traditional lenders check both your personal and business credit scores when approving a loan. Those with higher credit scores have more options, but there are still plenty of lenders that will work with you even if your score isn’t perfect. In addition, online lenders are typically more flexible with their credit requirements than brick-and-mortar banks.
Alternative Business Loans
There are several different kinds of alternative business loans that don’t require a credit check. These include business lines of credit, merchant cash advances and invoice factoring. These types of loans are typically short-term and come with high interest rates.
Depending on the type of loan, you may need to provide a personal guarantee or collateral. In some cases, you can even get a business loan with no credit check if you have a solid track record of making payments.
You can also try to obtain a loan through family and friends, or via debt crowdfunding platforms like Kiva and Mainvest. With these options, you’ll need to have a compelling pitch and a proven track record of revenue growth. In addition, these lenders will only lend if you’re able to attract donors and investors. Kiva also requires you to have a friend or family member act as an endorser to support your campaign. This is a bit of a catch, but it’s worth a shot if you’re unable to get a conventional business loan. no credit check small business loans