When a business owner needs funding to grow or maintain their business, they may seek out business loans no credit check. These types of financing options aren’t available from traditional lenders that require a FICO score. Instead, business owners with a low credit score or those without a credit history can find these financing options through alternative lenders. These lenders focus more on where the business is going in the future than what impacted the credit score in the past.
While there are many business loan no credit check options, it’s important to understand that these funding sources will typically come with high interest rates and fees. The good news is that they can help a business build its credit if used responsibly. As with any type of debt, these financing solutions should be used sparingly and should never be viewed as a long-term funding solution.
Whether you have bad credit or are a startup business with no credit history, you’ll likely find it challenging to obtain standard business loans that require a credit check. This is because traditional lenders will perform a hard or soft inquiry on your personal credit report when you apply for a business loan. Too many inquiries can hurt your credit scores, limiting your financing options. Fortunately, there are some business loans no credit check options that are designed for startups and those with low credit. These options can be found through alternative lenders such as Fundbox and Lendio. These lenders can provide lines of credit based on invoice collateral up to $100,000 at rates starting at 4.66% of the draw.
Inquiries from business loans no credit check lenders are considered soft inquiries, meaning they won’t affect your credit scores. These lenders can be a good option for business owners who are looking to explore all of their financing options before making a decision. This can save time and energy as well as prevent too many hard credit inquiries, which can damage your credit scores.
If you’re considering applying for a business loan no credit check, make sure to research the different lender options and compare costs and terms. Be careful of lenders that advertise “no credit check” or “guaranteed approval.” These are often predatory lenders that are trying to take advantage of borrowers with poor or no credit.
While you can still build credit with a business loan, it’s much easier to do so through other funding options that don’t rely on your credit. These can include small business loans, lines of credit, ACH loans and merchant cash advances. These funding options can provide the capital you need to grow or maintain your business, and they can also help you build a strong business credit profile.
When you’re ready to consider a business loan, it’s important to do your research to find the right lender for your situation. Depending on your unique business, you’ll likely find that there are several funding options to choose from. It’s also worth exploring other options, such as small business grants, microloans and credit cards.