The lending industry leans heavily on credit scores and history, making it difficult for many business owners to get approved for financing when they need it. But there are some types of small business loans that don’t require a credit check or put less emphasis on one. These alternatives can help you find the right funding option for your unique business needs, even if you have a rocky credit history or no credit at all.
These types of loan products are called no credit check small business loans because while they’re typically available to businesses with a rocky or no credit history, they usually still place a heavy focus on the current invoicing and revenue that a business generates. In addition, these lenders often have specific requirements for the type of business they fund, such as a minimum number of sales per month or the need to have an existing relationship with the lender.
If you have an existing business that meets these criteria, a no credit check loan is one of the best ways to quickly access capital and get your startup or business growing again. You can also explore alternative types of business financing that don’t rely on credit checks, including microloans, crowdfunding, and peer-to-peer lending platforms.
While most traditional lenders check business or personal credit, some waive this requirement and others only perform a soft pull, which doesn’t affect your credit. This is particularly common with online lenders, who often have more flexible eligibility requirements and may be more willing to take a risk on an unfamiliar applicant.
Other types of funding, such as microloans, can be a good fit for newer or struggling businesses with no or limited credit. These loans are provided by nonprofit organizations that are specifically dedicated to helping new, small or disadvantaged businesses. Some offer no interest or a very low rate, while others have flexible repayment terms.
Another option is to secure a small business loan with collateral, which could be a piece of machinery or inventory you own. The loan amount will be based on the value of that asset and is secured by that asset, so the lender has a right to take it away if you default on the loan.
In addition to these alternatives, there are other sources of funds for your business, such as grants. You can also try crowdfunding, where you ask for small amounts of money from a community of donors who believe in your idea or business. This is a great way to test the waters before seeking a larger business loan or investing your own money. You can also look into the type of government programs that might be available in your area to support your startup. These are typically local or state initiatives that provide grants to businesses based on certain geographic, economic and social requirements. The process for applying for these grants is usually much faster and simpler than traditional business loans, and there are a variety of different programs that you can search for.