Do Business Loans with No Credit Check Exist?

Credit is a funny thing when it comes down to it. Many people who are beginning to open their own businesses were not brought up in households that understood credit. The concept of a credit card was an offer given to you in your college dorm mailbox or maybe on the table in the cafeteria. This is where many people ran into problems with credit from the very beginning. I can remember when it seemed that every company was offering a free t-shirt to get students to sign-up for a card. The problem with this method was it led to an increased access to funding. This allowed students to pay for trips and non-essentials. And then the students with the cards had no means to pay them off. This issue is sadly leading to several business owners searching the internet for business loans with no credit check.

If you are one of the thousands of people that is still recovering from the effects of these promotions, don’t worry. We know that you have worked hard to rebuild your credit reputation. We know that rebuilding your credit can’t happen overnight. Even though these practices by credit card companies have been limited, they still exist. Thankfully the internet has led to a higher level of awareness of what credit is. But for many, they are still feeling the effects of poor credit decisions early in their adult lives and it is affecting their businesses.

So how does having poor credit affect your business’ ability to get a loan?

Almost every single traditional bank is going to pull your credit score when you apply for funding. If they see you are below a certain score they may refuse you the loan. Even companies with good credit are being turned down by financial institutions.
Even if you have good enough credit that a company is willing to give you a loan, you will often face a much higher interest rate than someone with perfect credit.
Each lender is going to give you a risk score. If you risk score is below a certain threshold, you will be denied. If your score falls into a certain range, your rate will be affected but you can still qualify. Then it will be up to your business to decide how bad you need the funding and if you are willing to pay the higher fees.

So as you can see, if you are now at the point where you are starting your business, credit becomes a much bigger deal. Even if you are applying for personal loans like a home or auto, you could have problems if your credit is poor. Thankfully for individuals who are struggling with their credit there are options for business loans with no credit check. But they are often going to come with much higher interest rates and/or fees associated with them, due to your risk score. But not always, so don’t worry.

Alternative to Traditional Business Loans

One option for non-traditional business loans with no credit check is a merchant cash advance. This is a great way to get access to business funding quickly. This funding source is not considered a loan but an advance. Unlike a loan, you will be paying a fixed daily percentage of your credit card transactions. Compare this to a traditional loan where you will pay a fixed amount each month.

Many businesses like this option because they do not have to worry about coming up with a set amount each month. They can focus on growing their business. This choice also has an automatic withdrawal so you don’t have to be concerned about forgetting or missing a payment.