Can You Get Business Loans With No Credit Check?

Have you had your business loan application denied recently?

If you did or you suspect this could happen, then this might be the most important article you will ever read…

And here’s why;

There are many reasons as to why you just got rejected.

For example, you may have cash flow problems, or your business is new.

Or is it your credit score?

Lenders will have a hard time working with you if your credit scores are damaged or you have a rocky credit history.

If you currently have a poor or bad credit score, you need to pay the most attention.

So, can you get business loans without a credit check?

With over two decades of experience as a financial coach and banking expert, I’ll show you the best loans that don’t require a credit check or a high credit score.

Even though most lenders do credit checks as part of the loan application process, some lenders don’t require this.

However, no-credit-check business loans often are more expensive since they have higher interest rates and fees.

Best Business Loans With No Credit Check

Why Do Lenders Check Your Credit For A Business Loan?

So, why do lenders need to check our credit when applying for a business loan?

Almost any time you try to get a conventional business loan, lenders will most likely perform a credit check on your personal and business credit.

Lenders can view your personal credit report to see your payment history, length of credit history, amounts owed, credit type mix, and new credit.

On the other hand, your business credit will show your payments to vendors, the amount of used credit, and the risk of failure in your specific industry.

Types of No Credit Check Business Loans

If you currently have a poor or fair credit score, don’t lose hope because there are still a few types of business loans that don’t require credit checks, or even if they do, they don’t usually require high credit scores to get approved:

Merchant Cash Advances

With merchant Cash Advances (MCA), your business can get revenues in advance based on your past revenues.

MCAs or business cash advances are usually available to businesses with good or strong cash flow.

A merchant cash advance’s main focus is your business’s future sales, not your credit score, when determining whether to approve or deny your loan application.

However, they may still examine your credit score to see whether your business can repay the debt.

Fortunately, they are still willing to work with business owners with lower credit scores, even as low as 500.

Invoice Financing

In invoice financing, you’ll use your business’s unpaid invoices as collateral.

Invoice financing companies will fund you a percentage of these unsettled invoices.

These companies focus more on the value of your invoices than your credit scores, making it easier for business owners with bad credit to qualify for this type of financing.

Invoice financing can help businesses get their capital through unpaid invoices.

Online Lenders

Online lenders offer various loans with flexible qualification requirements.

These lenders are popular among entrepreneurs with bad credit scores since it’s easier to qualify for this loan than traditional bank loans and other popular lending agencies.

The application process is simple and can be finished online in just a few minutes.

Crowdfunding

Nowadays, there are now crowdfunding websites like Kickstarter or Wefunder that help entrepreneurs get that much-needed funding.

On this platform, you can create posts about your product or services, and people can donate their money to help your startup.

However, crowdfunding usually requires you to finish your fundraising goal to be able to get the money.

You’ll choose the goal amount. You can even reward donors by giving them early access to your product.

This type of financing has become more popular over the years since the money being raised is purely from donations, and you’re not obliged to repay it.

Microloans

Also known as microfinancing, microloans are small loans given to business owners or entrepreneurs who lack collateral.

Microloans can have specific spending restrictions, but they typically cover the operational cost and working capital for your much-needed equipment and supplies.

Best business loans with no credit check

If you’re looking for a much more specific loan that doesn’t require a credit check, I can still help you!

Below, we’ve listed a few of the best business loans with no credit check. Keep in mind that these loans often carry higher interest rates.

Best for PayPal Users: PayPal Working Capital Loan

As the name suggests, PayPal’s Working Capital Loan is best for PayPal users.

This loan doesn’t require a credit check. Instead, it will evaluate your PayPal account history.

To qualify for this loan, you must be a PayPal Premier or a business account holder for at least 90 days.

For PayPal Premier accounts, you must have an annual PayPal sales of at least $20,000.

On the other hand, PayPal business accounts must have at least $15,000 to qualify.

This loan offers flexible payments, and the money can arrive in minutes, unlike traditional loans, which take days or weeks.

Best for Square Users: Square Loans

Like PayPal, Square offers loans to small business owners who conduct businesses on its platform. To qualify for a Square loan, you’ll ideally process $10,000 or more annually through the platform.

You must process about $10,000 annually through the platform to qualify for this loan.

Several factors that help Square evaluate applications are payment history, customer mix, disputes, and more.

Square loans have fixed fees that vary depending on your loan amount and processing volume.

Square loan amounts are between $300 and $250,000.

Best for Invoice Factoring: FundThrough

If you want to try invoice factoring, I suggest looking up FundThrough loans.

Funding here is easy and fast. However, you must have an outstanding invoice in your accounts receivable or invoice to a customer of at least $100,000.

Fees are usually between 2.75% and 8.25% but will also vary depending on net terms.

Best for CrowdFunding: Kiva Loan

Lastly, our pick for the best loan for crowdfunding is Kiva Loans.

Kiva caters to small business owners. Kiva doesn’t necessarily have a minimum credit score requirement, making it one of the best options for business owners with poor credit scores.

Kiva loan offers a maximum loan amount of $15,000, which is best suited for startup businesses.

The payment schedule is also flexible, as you can repay the loan for up to 36 months.

However, the loan process in Kiva can be lengthy.

Alternative Financing With Low Credit Score Requirements

If you still didn’t qualify for the loans above, keep your head up! There are still other alternative financing options that have low credit score requirements.

Here are a few examples:

Equipment Financing

If you’re looking to buy equipment but are short in budget, consider looking for equipment financing.

These types of loans differ slightly from traditional term loans.

In equipment financing, the lender gives you the money to fund the equipment you need; however, the equipment you buy will be collateral for the loan.

Business Credit Cards

Most credit card issuers check your personal credit, and they are more attracted to people with high credit scores.

However, some will still offer business credit cards even if you have bad credit.

Keep in mind that these cards will have higher interest rates and stricter terms.

Consistently paying your bills on time can help improve your credit score, as Payment History makes up about 35% of your FICO Credit Score.

Short-term Loans

Some short-term lenders cater to borrowers with poor or fair credit.

They may offer loans to people with bad credit if they show strong revenue or business growth.

These loans usually have repayment terms of 6 to 24 months, and lenders can charge higher interest rates because of bad credit.