Best Business Start-Up Loans with No Credit Check

What Are No Credit Check Business Loans?

Whatever your motive may be – you might be exploring the potential option of a business loan without a credit check. A business loan with no credit check is what it sounds like. It’s a form of borrowing money while forgoing a credit check.

While there may be some alternative no credit check business financing options available, there might be some potential drawbacks to the seemingly ideal situation. Small business loans with no credit check can come with a hefty price tag or restrictive limitations. Additionally, if they are not reported to your credit report, they can not work to help establish your creditworthiness. Creditworthiness is important to establish for future loans.

Regardless, the desire to obtain the funding you need to grow your business may be worth a hefty price tag. A no credit check business loan might not be guaranteed, though. You may need to get creative and utilize a few different methods of no credit check financing – or boost your credit score and pursue a traditional business loan. The choice is yours, but we’re here to help you understand your options.

Types of Business Loans That Don’t Require Credit Checks

Most business loans require a credit check. However, you might be able to get prequalified without a credit check. At PrimeRates, you can compare business loan offers with no credit score impact. If you choose to pursue an offer, you will work with one of our lending partners who will run your credit. For a no credit check business “loan,” there are alternative types of business financing that do not always require a credit check. Alternatives include invoice factoring or venture capital. We will explore these options a little later on.

Can You Get a Business Loan With No Credit Check?

Guaranteed solutions for business financing are hard to come by. If something seems too good to be true, proceed with caution. Put yourself on the other side of the table, if you were unable to perform a credit check or collect collateral, what would you need to feel comfortable loaning money? Would it be a high reward if you survived the risk? Would it be a deposit? A percent of ownership of the business you are loaning to? While you may qualify for a business loan with no credit check, ensure you read the fine print and understand the tradeoff. A traditional business loan that does require a credit check may come at a lower cost with more benefits to the business owner. To find out if you qualify without impacting your credit score, visit PrimeRates.

How To Get a Business Loan With No Credit Check

Being aware options exist is one thing, but pursuing them is another. If the idea of a no credit check business loan has caught your attention, here are some steps you can take to get one.

1. Define your needs and budget. Before pursuing a loan, it can help to know how much you need to borrow and what the funds will be used for. It can also help to consider how long you need to borrow the money. Repaying the loan, credit check or not, is also something to consider. Review your budget to determine how much you can afford to repay and at what frequency.
2. Explore options. It’s important not to get ahead of yourself, even if you’re excited. If you’re pursuing a no credit check business loan, you might be in a tough or odd spot. Despite the circumstances, you should aim to make sound business decisions as they can weigh on future success. Understanding no credit check and credit check loan options can help you determine what options might work best for your situation.
3. Compare offers or options. What you read online may be different than what’s offered to you. Pay close attention and invest time researching specific options and real offers. If a credit check business loan is something you might consider or find value in, visit PrimeRates to check and compare offers without impacting your credit score. With only a few minutes of time, commitment-free, you can compare offers through our secure platform. This can help you make informed business decisions.

Pros and Cons of Business Loans With No Credit Check

Pros and cons are important, especially when it comes to financial decisions such as loans. Loans have the opportunity to help businesses grow. However, with interest and fees and an obligation to repay the loan, they can impact the bottom line. Part of justifying the cost of borrowing money is the confidence that it will truly help your business grow. Here are some basic pros and cons of business loans with no credit check. We encourage you to expand on these with pros and cons that relate specifically to your situation.

Pros:

• Business loan options for bad credit
• No credit impact if you default (if the loan is not reported to any credit bureaus)
• Potential opportunity to borrow more than once if you repay the loan

Cons:

• High costs associated
• Diminishes the opportunity to build credit
• Impacts bottom line

Alternatives to No-credit-check Business Loans

• Invoice Factoring (B2B companies) 

Cash flow issues are real. With incoming and outgoing cash on a seemingly never ending basis, you may need cash to fill some gaps in your cash flow. For B2B companies, invoice factoring may be a no credit check option that can help do just that. By selling unpaid invoices at a discounted rate to a third party, you can receive cash advances in exchange. Invoice factoring is most beneficial for short-term expenses or gaps in cash flow. The factoring company can keep an agreed-upon percentage of the invoice(s) amount in exchange for the cash advance.  If businesses do not pay the invoices, you may face the responsibility to ensure it’s paid in full. You can expect to pay in the ballpark of 1% to 5% of the total invoice value monthly to a factoring company.

• Merchant Cash Advances (MCA)

Companies that collect credit or debit card sales can use a merchant cash advance. Based on future credit or debit card sales, businesses can be advanced a lump sum of cash. While this is not technically a loan, it is a way to access cash without a credit check. Most MCA companies charge a factor rate (instead of an interest rate), which is multiplied by the entire advance amount. In some cases, repayments, including the borrowed amount plus the factor rate, are required daily for MCAs.

• Family or Friend Loans 

In some cases, family members or friends may be willing to loan or give you money. Before pursuing this option, consider your relationships. Finances can interfere with relationships, so this option may not be worth it. Should you continue with this option, communicate clearly with your friend or family member to manage expectations and create a formal agreement. You can even throw in an incentive for them.

• Venture Capital 

Venture capital involves giving up equity or ownership of your business, usually only a percentage, in exchange for financial backing or support. In some cases, the backer will not require a credit check. Since you are giving up ownership in your business, though, you probably won’t want to or be able to use this method over and over again.

Do you need good credit to start a business?

Having good credit is not a requirement to start a business. However, some creativity may be required to overcome potential obstacles.

How do you get a loan to start a business with bad credit?

If you have bad credit and want to start a business you should look into business startup loans with no credit check. Below, we have compared some of the top choices for borrowers with bad credit.

Can you get a loan for a business you haven't started yet?

Entrepreneurs can get personal loans that are used to fund business ventures before the business is created. Some examples include a personal loan, credit card, or home equity loan (if you own a home).

Bad Credit Business Loans

Why do lenders need to check credit for a new business?

Anytime one party lends money to another party there is usually some level of risk involved. Running a credit check can allow the lender to evaluate the risk and propose appropriate terms.

What are some reasons that a business might borrow money?

Whether a business is just starting up or is well established, there are many reasons they may borrow money.

Some reasons a business might borrow money can include…

• Pay startup costs
• Cash flow
• Reduces personal risk
• Purchase inventory
• Make more money than it costs to borrow the money

How much can I get for a startup business loan?

The amount you qualify for can vary on various factors such as credit score, how established the startup is, the type of loan, and so forth. Startup business owners will likely need to obtain the loan using their personal collateral and or qualifications such as credit score. To explore loan offers without impacting your credit score, visit PrimeRates.

Do banks give loans to start a business?

Most banks require a credit check to obtain a business or personal loan. While you may be able to receive an offer without a credit check, if you accept the offer you will likely need to agree to a credit check. Credit check or not, here are some tips for comparing business loan offers.

• Pay attention to APR or total loan cost, not just the monthly payment.
• Compare offers on the basis of fees or restrictions, such as spending restrictions.
• Take into account perks the lender may offer such as autopay discounts.
• Note the repayment structure to determine if it works with your business budget.
• Check reviews on the bank or lender.