Business loans can be a lifeline for entrepreneurs who need to fund a new venture, expand an existing one, or take the next step toward success. However, most traditional business lenders conduct a hard or soft credit check on applicants to evaluate their personal and/or business credit scores to determine creditworthiness before approving financing. Fortunately, the modern lending economy has given rise to a handful of alternative financing options that don’t require a credit check or have low minimum credit score thresholds.
Here are six options for small business financing with no credit check.
The best option depends on your company’s relationship with the lender. The first four picks—credit card companies, an ecommerce platform provider, and two payment processing companies—only offer no-credit-check business loans to customers who already use their products. The other two—Fundbox and invoice factoring—offer lines of credit based on company-specific invoicing data rather than a business’s overall financial health.
In addition to being available for a wide range of business needs, these types of loans often come with low minimum credit score requirements—and may even be available for businesses with bad personal or business credit. These funding options are designed to help borrowers build or repair credit with on-time payments, and can be used for short-term operational support, such as purchasing inventory or paying suppliers.
These lenders typically have faster approval and funding times, but they also tend to charge higher interest rates than traditional business loans, and have lower borrowing amounts. They also don’t typically report to the three major credit bureaus.
Some traditional banks offer small business loans that don’t require a credit check, but these are only available to borrowers who already have a banking relationship with the bank. The remaining lenders on our list—Kiva, PayPal Working Capital, and Square—are all nonprofits that provide microloans based on what’s known as social underwriting. Social underwriting is a process that evaluates the potential impact of your project on the community, which can be more important than an individual’s credit history or financial track record.
Nav’s free business finance matching tool compares your best financing options based on your unique company’s data. Learn more.
Even with a solid plan and an outstanding business, you may need to wait a bit to qualify for a small business loan with great terms. In the meantime, you can try these no-credit-check financing options to get the cash you need to grow your business. And if you do eventually need to apply for a traditional business loan, make sure to work on building your business’s credit profile to boost your score and improve your chances of qualifying for better terms in the future. If you’re ready to start comparing financing options, fill out our simple form. It only takes a minute, and we’ll match you with the best financing for your company. no credit check small business loans