If you have bad credit, or if you’re just starting your business and don’t have a strong history of credit, it can be difficult to qualify for traditional business loans. Fortunately, there are some lenders that specialize in offering small business loans no credit check. Typically, these lenders focus on other factors besides credit and will require you to submit documentation such as your business plan and statement of intent. Some will also allow you to prequalify without a hard credit inquiry, which can help you avoid tarnishing your credit report with multiple inquiries.
There are also some alternative funding options that are available to small businesses, such as invoice factoring, ACH lending and business lines of credit. These alternatives focus less on credit and more on other factors, such as your business revenues. Some will also require you to provide proof of these revenues, such as bank or credit card processing statements. Other options include microloans, which are typically offered through nonprofit organizations that aim to help new, small or disadvantaged businesses. These typically don’t require a credit check and may have low or no interest rates.
Many of these alternatives to traditional business loans require you to provide a personal guarantee, meaning that you’re personally liable for the debt if your business fails. While these can be a good option for those with poor credit, it’s still important to work on improving your own personal credit score before seeking funding for your business. Consistently making your payments on time can help raise your credit score and make it easier for you to get approved for future business loans.
It’s also important to note that these types of small business loans no credit check tend to come with higher interest rates and fees than traditional business loans. As a result, you should only seek this type of financing as a last resort or when your business cannot afford to pay for itself otherwise. For more information on how to find the best business loans for your situation, check out NerdWallet’s list of the best business loan options.