No credit check business loans

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    Chris Godfrey

    Page written by Chris Godfrey. Last reviewed on February 22, 2024. Next review due October 1, 2025.

    Securing a small business loan can be challenging for many organizations, but for business owners with bad credit, it can be extremely tough. No credit check business loans may provide a solution to this problem, although this type of financing typically comes with higher costs, shorter terms and lower sums available. 

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      What are no credit check business loans?

      No credit check loans are usually provided by online and alternative providers instead of traditional lenders such as banks and credit unions. With this type of financing the lender does not check your personal or business credit score when reviewing your loan application. 

      No check business loans can help small business owners with poor credit get the financing they need, but securing a loan without undergoing a credit check can be difficult. Most lenders will check your credit when you apply, so finding lenders who are happy to forgo this basic requirement could take a lot of time and research. Also, you should be prepared for the fact that financing without a credit check can be more expensive than other types of business loan.

      Why does a business need a credit score?

      A business credit score is an indicator of the financial strength of your organization and its ability to pay its bills. This is an important metric. Lenders will consider your business credit score when deciding to lend you funds. Your score will also impact how much you pay for borrowing the cash. The better your score, the better your chances of getting a loan at a competitive interest rate. 

      Business credit scores are different from personal FICO credit scores. Usually graded from 1 to 100, a good business score is 80+. If your score is less than this, you may struggle to secure the best types of loan and you should follow these steps to repair your credit:

      Check your credit reports

      It is common for mistakes to occur on credit reports – both business and personal – but incorrect information could have an adverse impact on your loan application. Check both reports and ensure the details they contain are correct. If there are errors, get them amended before applying for a loan.

      Re-build your credit

      If you don’t have a strong business credit score, you can build one by following these steps:

      • Register your business with the state (if applicable)
      • Apply for an Employer Identification Number (EIN) from the IRS
      • Get a DUNS number from Dun & Bradstreet, a major business credit bureau, so that your business credit activities are recorded
      • Open business checking and savings accounts to keep your business finances separate from your personal account
      • Get a business credit card and manage it properly

      Can you get a business loan with no credit check?

      Yes, although you will need to shop around to find lenders who offer this kind of financing and collateral may be required. Some lenders may be willing to provide you with a loan based on a ‘soft credit check’. This is a review of your personal or business credit (or both) that does not leave a hard search statistic on your credit report. Alternatively, you could consider loans such as a merchant cash advance or invoice financing that use your sales receipts and billings as security for a loan – these types of borrowing are often available without a hard credit check, although they are typically more costly than standard business loans.

      Why consider a no credit check business loan?

      No credit check business loans may be a good financing solution for business owners who:

      • Have poor credit or do not want a search statistic on their personal credit report
      • Are seeking business loans without providing a personal guarantee
      • Wish to keep their business finances completely separate from their personal finances

      Unfortunately, the majority of lenders will check business and personal credit scores when you apply for a loan. If this is a problem for you and/or your business, you could consider the financing options shown below:

      What types of business loans don't require credit checks?

      There are several types of no credit check business loans, and they are usually provided by online and non-traditional lenders. However, interest rates, fees and terms and conditions for no credit check loans can vary significantly, so it is important that you do your homework and check all the options before settling on a deal. Popular no credit check business loans include:

      Secured loans

      Secured business loans are easier for borrowers with bad or no credit to obtain and they may be available without a credit check. You provide hard assets, such as real estate, plant and machinery, or inventory as security for the loan. The lender holds a lien on the assets until the loan is paid back, then full ownership returns to you. 

      Business credit card

      It may be possible to secure a business credit card to fund your organization without a credit check – although the interest rates and fees you pay may be very high. The application process for these cards is usually fast, streamlined and does away with the need for piles of paperwork – in many cases you won’t even need a formal business structure to apply. Business credit cards are also great for re-building your credit if you pay off the balance every month. No added security is usually required.

      Equipment financing

      Equipment loans are ‘self-collateralizing’ – they use the asset you’re financing as security, similar to a car loan or a residential mortgage. Once the loan is approved, the lender sends the funds to the equipment vendor, who then delivers the machinery. You use the equipment as you pay for it and the lender maintains a lien on the title to the machinery until the loan is repaid. No other collateral is required. 

      Invoice financing

      Also known as account receivables financing, this type of loan allows you to borrow against the value of your unpaid invoices and is best for B2B organizations. The lender will usually provide up to 95% of the invoice value within a few days or even hours of the bill being raised. Your invoices act as security for the loan, no other collateral is required.

      Merchant cash advance

      Available for businesses that accept customer payments by credit and debit card. You borrow against the value of your card sales. As your card sales increase, your borrowing limit goes up. Pay the loan back with a fixed percentage of your card sales on a daily, weekly or monthly basis. Your sales act as security for the loan, no other collateral is required.

      How to get a business loan with no credit check

      As well as the loan options above, you may be able to get funding for your business from other sources without a credit check:

      • Your current bank will have a unique understanding of your business, and if you’ve been with them for some time, they may be open to providing financing without a credit check.
      • Crowdfunding or small business grants. Raising the cash you need with these types of non-debt funding can be challenging, but you do not have to pay the money back if you spend it as you said you would.
      • Using your personal savings or funds from family and friends could provide the funds you need or at least provide a deposit on a bigger source of funding.

      What are the pros and cons of business loans with no credit check?

      As with all forms of financing, there are advantages and disadvantages with no credit check business loans:

      Pros:

      • Secure the financing you need even if you have bad credit
      • Repaying no credit check loans on time may help you to rebuild your credit score

      Cons:

      • No credit check financing is usually more costly, with higher interest rates and fees than other types of business lending
      • No credit check loans are typically short term
      • Not all no credit check loans will help you to rebuild your credit score

      Can I get guaranteed startup business loan with no credit check?

      Possibly, although few lenders will provide a startup loan without a basic credit check and if you can find such a loan, the costs will usually be high. Additionally, keep in mind that startup loans are always some of the most difficult to secure and at the very least, legitimate lenders who provide this sort of financing will conduct a soft business and personal credit check. Additionally, no reputable lender will guarantee your approval for a loan without reviewing your financial status first 

      What are the alternatives to no credit check business loans?

      Just because you can’t qualify for a standard business loan or you do not want to pursue no credit check forms of financing, it doesn’t mean you have to give up your big ideas. There may be other ways to raise the funds you need without a credit check:

      Small-business grants

      Business grants can be a good option for small business owners. Credit checks are usually not required, and, unlike business loans, you don’t need to repay the money. However, the downside is that it can be very tough to secure a grant. They are often restricted to specific locations, industries or causes, making it difficult to qualify.

      Five places to find small business grants:

      Crowdfunding

      Available via various online platforms, crowdfunding can bring in large sums if your presentation hits the right spot. Although it may be tough to raise big money in small donations from hundreds of donors, you will pay no interest charges and you do not need to repay the money if you spend it where you said you would. An eye-catching idea and a powerful pitch is essential to succeed with this funding option.

      Friends and family

      Many small business owners borrow money from family and friends, especially when they are trying to get a new venture off the ground. However, using funds from loved ones can often be a source of contention if the ground rules are not clear from the start. If you have access to this type of financing opportunity, make sure your funders know if they are providing a loan, a gift or an investment from the start. If there are plans to pay the money back, put this down in writing with a clear repayment schedule – including a plan of action if things do not turn out as expected and you cannot pay the funds back on time, or at all.

      Get started with Swoop

      No matter if you’re seeking your first loan or you’re a seasoned borrower, working with business finance experts can make all the difference when applying for funding. Contact Swoop to discuss your borrowing needs, get help with your application and to compare high-quality business loans that do not require a credit check from a choice of lenders. Give your organization the financial boost it deserves. Register with Swoop today.

      Written by

      Chris Godfrey

      Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Wells Fargo Bank, Visa, Experian, Ebay, Flywire, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of US consumer and business finance.

      To read our editorial policy, please click here.

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