Many lenders require a credit check and may also require some sort of collateral. However, there are a few lenders that provide small business loans with no credit check and offer lower interest rates than conventional lenders. In addition, you can find lenders that don’t do a credit check by going through an online lending platform. This helps you avoid having your credit pulled by dozens of different lenders and reduces the impact to your credit.
Personal and small business loans typically require a credit check and often require a personal guarantee, meaning you are personally responsible for the debt if the company is unable to repay the loan. Some commercial lenders also require a strong business plan and good financial history to qualify for financing.
But, there are some lenders that provide no-credit-check small business loans, including a handful of alternative lenders, microloans and some crowdfunding sites. While these options are limited, they can be helpful for new business owners who don’t have a solid credit score.
Small business loans without a credit check are typically only available to customers of the lender’s other products or services, such as an ecommerce platform or payment processing service. For example, Square Working Capital only grants loans to businesses that use the company’s point of sale system. Other options include loans from the Small Business Administration (SBA), which are guaranteed by the federal government and can be a great option for entrepreneurs with bad credit.
Another way to get a small business loan without a credit check is through equipment financing, which is designed for specific types of capital expenditures such as machinery or computers. Some equipment financing providers don’t check your personal or business credit, but most will do so and may consider your business performance more than your credit score when determining whether to approve your application.
If you’re looking for a small business loan with no credit check, you’ll want to apply through an online lending platform that has a wide range of lenders in one place. This can help you avoid sending your financial documents to dozens of different lenders, which causes multiple hard credit inquiries on your credit report and can hurt your chances of qualifying for financing.
Lastly, you can try to secure a loan from friends and family members who believe in your vision and are willing to invest their own money into your business. However, this can put a strain on your relationship and should be done only after careful planning and setting up clear financial expectations with the investor.
Nav’s team of experts can help you explore all your funding options and find the best business loan for your needs. Contact us today to learn more.