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If you have a weak or shaky credit history, you may be able to get a business loan without a credit check. Most lenders will conduct a credit check as part of the application process, but some lenders waive this requirement or only make a soft inquiry that won't affect your credit score.
However, these no credit check business loans are usually expensive because they have high interest rates, high fees, and short terms. Also, be careful of unscrupulous lenders who promise “no credit check” or “instant approval” in an attempt to take advantage of borrowers who don't qualify for small business loans.
🤓 Geek Tips
If you're worried about how a hard credit inquiry will affect your credit score, know that the inquiry will only remain on your credit report for up to two years and won't have a significant impact on your score after a few months. Learn more about hard credit inquiries here.
To better understand the unique needs of your business, we'll begin by completing a short survey.
Once you find your perfect match, our team will be happy to guide you through the next steps of the process.
Best business loans with no credit check
While no credit check business loans are rare, alternative online lenders can be more flexible with credit requirements and get you funding faster. These loans can help you build your business credit, but they're often structured as merchant cash advances and charge high interest rates, so you need to understand the true cost of borrowing before you sign a contract. Our business loan calculator can help.
Here are some loan options to consider.
You must have had a PayPal Premier or Business account for at least 90 days.
This can range from $1,000 to $250,000, depending on your borrowing history and account type.
Fixed fee.
PayPal working capital loans don't require a credit check. Instead, your PayPal account history is taken into consideration. If you have a Premier account, you must process at least $20,000 in PayPal sales per year, and if you have a PayPal Business account, you must process at least $15,000 in PayPal sales per year.
This no credit check business loan offers flexible payments, and funds arrive in minutes. Instead of a traditional annual percentage rate (APR), you pay a fixed fee based on the loan amount, your chosen repayment rate, and your business's PayPal account history. Like a typical merchant cash advance, you use a portion of your sales to automatically repay the loan and fees.
Loan amounts range from $300 to $250,000.
There are no personal guarantees and applying will not affect your personal credit.
Fixed fee.
Similar to PayPal, Square offers financing to business owners who sell on its platform. To qualify for Square financing, you should ideally be processing at least $10,000 a year through the platform.
Square evaluates your application based on factors such as payment frequency, customer mix, and payment disputes. Loan repayments are automatically made through Square as a percentage of your daily credit card sales. The fixed fee you pay varies based on the size of your loan and the volume you process.
If you're approved, you'll receive your funds within 1-3 business days. If you have a Square checking account, you'll receive your funds instantly.
Best for Invoice Factoring
Fees range from 2.75% to 8.25% depending on net terms.
You must have at least $100,000 in outstanding accounts receivable or invoices with any one customer.
Funding can be provided as soon as the next day.
If you have a shaky credit history and your capital is tied up in unpaid invoices, FundThrough may be able to provide the financing you need. FundThrough offers invoice factoring for B2B companies with unpaid invoices less than 90 days old.
FundThrough advances business capital and collects payments from customers in exchange for a variable fee based on the net terms of the invoice. FundThrough does not require a credit check; instead, it evaluates applications based on invoice amounts, banking history, and tax history.
It will prepay up to 90% of your outstanding invoices, up to $10 million.
The factor rate starts at 0.5%.
Personal guarantees are required for anyone who owns more than 10% of the business.
AltLINE is an invoice factoring company that operates as a division of The Southern Bank. There are no minimum credit scores, minimum revenue requirements, or length of time in business requirements, making it a great option for startups with less than stellar credit.
Unlike most factoring companies, AltLINE has its own bank, allowing it to lend directly to your company rather than acting as an intermediary, which also means cheaper and faster funding.
Types of business loans with no credit check
Generally, there are several types of business loans that don’t require a credit check.
Invoice factoring is a small business financing method in which you sell unpaid customer invoices to a factoring company, which then collects the payment from the customer. Invoice factoring is not technically a loan, and approval is usually based on the customer's creditworthiness. Payment processor loans are a type of merchant financing that payment processors usually offer only to their customers. Repayments are automatically collected from these merchants' accounts, and approval is usually based on sales volume. Merchant cash advances (MCAs) are cash advances that are repaid as a percentage of daily sales that are usually automatically deducted. Although no personal credit check is usually required, MCAs are one of the most expensive forms of small business financing, often with triple-digit annual interest rates.
Pros and Cons of Business Loans Without Credit Check
Strong Points
Making payments on time can build your business and personal credit profile.
It may be possible to access financing even if you have poor credit.
Paying your loans on time may make it easier to borrow money in the future.
Cons
No credit check business loans often come with high interest rates that may outweigh the benefits of the loan.
Not all lenders report on-time payments to the credit bureaus, which means taking out a loan won't necessarily help you build credit.
No Credit Check Business Loan Alternatives
If you can wait to obtain business financing until your credit score is better, you'll likely be able to receive more competitive interest rates and repayment terms. However, you can also consider options that don't necessarily require a good credit score, such as:
Small and medium-sized business subsidies
Business grants are available from federal and state government agencies, as well as private companies. You usually don't need a good credit score to qualify for a business grant, and some are specifically for startups.
Depending on the company you are funding, you may have to meet other criteria. For example, federal Small Business Innovation Research grants are only available to companies that conduct research and development for technological innovation and scientific research.
Finding and applying for small business grants takes time and effort, but if you win a grant, it can mean free funding.
Non-Traditional Lenders
Alternative, or non-traditional, lenders are, strictly speaking, lenders other than banks or credit unions. Many non-traditional lenders, such as non-profit lenders, online lenders, and Community Development Financial Institutions (CDFIs), offer safe and fair options that don't require excellent credit. For example, Accion Opportunity Fund has a minimum credit score requirement of
570
but may work with lower scores on a case-by-case basis. Similarly, OnDeck is an online lender that offers term loans and lines of credit and requires a minimum credit score.
625
.
Crowdfunding
Crowdfunding is a great option for startups and other businesses to raise funds using the power of the internet and social media. You use a crowdfunding platform to set up your campaign, providing information about your business and your fundraising goal.
Once your campaign is live, you can promote your business to friends, family, and others who might be willing to donate to support your company. You can also offer rewards in exchange for donations, like exclusive access to your product or a discount on a purchase.
On the other hand, you can also offer equity crowdfunding, where you sell a portion of your company ownership in exchange for funding.
Friends and Family
If you have people in your network who can provide funding, you can reach out to them when you need funds, but it can be difficult to borrow money from friends and family, so it's best to make clear financial agreements up front.
You should specify whether the funding will be through donations, a loan, or in exchange for equity. Whichever option you choose, your contract should detail the terms of the funding to avoid straining relationships with friends and family.
FAQ
Can I get a business loan with a credit score of 500?
Yes, it’s possible to get a business loan even with a credit score of 500, but you may end up paying higher interest rates and fees.
How do I get a business line of credit if I have no credit?
Even if you don't have a personal credit history, if you have built an established, reputable business, you may be able to obtain a line of credit through an online lender or a traditional lender such as a bank, especially if you can secure the line of credit with a deposit or other collateral.
What types of business loans don't require a credit check?
Merchant cash advances, payment processor loans, and invoice factoring loans are some examples of loans that don't require a credit check.
Compare small business loans without affecting your credit
Tell us about your business and discover personalized financing options in about 3 minutes.
Loan amount
$0 – $49,000$50,000 – $99,000$100,000 – $299,000$300,000 – $499,000Over $500,000
Credit score
720 or more 700 – 719660 – 699640 – 659620 – 639580 – 619550 – 579550 or less
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