No credit check business loans are a type of financing that doesn’t require lenders to review your personal or business credit before approving you for funding. Because traditional lenders use credit checks as a key criteria when reviewing your business loan application, these financing arrangements aren’t the best option for business owners with bad credit or those who are new to the business world and don’t have a solid track record. There are other ways to obtain business loans without checking credit, however, such as applying for a short-term business line of credit or seeking out alternative lenders.
Alternative Lenders for Small Business Loans No Credit Check
Many businesses are rejected for a business loan because of their credit history and score, but there are a number of alternatives to consider for those who don’t qualify for a typical small business loan. Most of these alternative funding arrangements are based on other factors besides your credit, such as revenue and time in business.
You can also try to secure a business loan from an online lender, such as Lendio or National Business Capital, which don’t use credit checks for all of their funding applications. These lenders typically use other data sources, such as your business banking and payment processing history, to determine if you are eligible for a loan. Typically, these online lenders offer fast approval and funding times, but you should note that they will likely have higher interest rates than other options. It’s also worth mentioning that these types of online lenders don’t usually report on-time payments to the major credit bureaus, which means you won’t benefit from having a loan reported in your credit history.
Merchant Cash Advances
A number of payment processing and credit card companies have transitioned into the lending space, offering financing to their business customers. One such provider is PayPal Working Capital, which offers a fixed fee business loan to business owners that receive a significant percentage of their sales via PayPal. The amount of the loan is based on an algorithm that evaluates past invoicing and sales trends, as well as current business revenue. Applicants can get approved within minutes and may have capital in their PayPal account as soon as the next business day.
These types of financing arrangements don’t check your credit and therefore do not have the same impact on your business as traditional business loans, but they are a good way to bridge the gap between where your company is now and where you want it to be in the future. They may have a high minimum revenue requirement, though, and are generally not the best option for those who have a poor or nonexistent credit score. They may also come with steep fees and interest rates and have shorter repayment terms than traditional business loans. You should also note that these lenders don’t often report on-time payments to the credit bureaus, which might limit your ability to build or repair your credit with this type of loan. small business loans no credit check
