Looking for Business Startup Loan with No Credit Check? Here is what you need to know
Most people tend to overlook their credit rating until they are in urgent need of cash. This is the time when they realize how important credit rating can be when it comes to applying for a loan to buy a car, purchase property or even for small business financing. So whether you have already been denied a loan due to poor credit scores or you are still looking for the best merchant cash advance to apply but your credit score isn’t attractive, you may want to know where to find a small business loan with no credit check. It is almost impossible for entrepreneurs with poor credit to have their loans approved by banks. But with the wide diversity in the small business lending field, there are many choices to choose from, besides traditional lending. You will surely find a lender who is willing to provide a loan without considering your credit score. So what do you really need to look for in small business startup loans no credit check?
Finding the best small business loan with no credit check
Most lenders who offer new business loans to entrepreneurs with poor credit will require you to be in the business for at least 3 months. But even when you are starting out with the business, there are several small business startup loans no credit check options available. For you to find such a loan, it is important that you have a creative mind. When you get a lender who is willing to finance your business, they will first evaluate the risk of your business defaulting on the loan. If you are a startup business without any history to prove that your business runs smoothly, how can you convince a lender that you are able to repay the debt? In this case, there is no way you can access a loan from traditional lending institutions. The only way out will be to find alternative lending for small business startup loans with no credit check.
Finding business startup loans with no credit check
If you are worried about a poor credit score when it comes to finding a business capital loan, most alternative lenders will only do a soft credit pull that will not have any impact on your credit score. First, find out what the FICO score ranges are before concluding that no lender will be willing to work with you. At times, you might only be underestimating your ability to acquire a startup loan due to poor credit when there may still be several options for you. Here are some of the stages that lenders look for in your credit report before issuing a small business loan with no credit check.
- Credit score of 700 and above
If you are a startup business and your credit score is at 700 or higher, it means that you already meet the minimum credit requirements and you are eligible for different types of small business capital loans.
- Credit score of 650 to 700
With this credit score range, you are still on a safe side. If your business is in shape, you can qualify for an SBA loan for borrowers in this range.
- Credit score of 620 to 650
If your credit score is in the 620-650 range, you may have limited loan options available. If you have been in the business for a few months, some alternative lenders can provide medium-term loans for your business.
- Credit score of 500 to 550
With such borrowers, it can be quite a challenge for you to access a business loan. But as much as your credit score is not attractive enough, it doesn’t mean that you are out of options. If you have a business history and business financial statistics to prove that you can repay the loan, you can still qualify for secured or short-term loans.
- Below 500
At this point, the situation will get a bit tricky. With a credit score of below 500, there are limited financial options available for you. It is advisable that you first take some time to boost your credit score before considering any form of business financing.
- Credit score of 700 and above
Types of business loans with no credit check
Now that you are aware it’s possible for you to access small business loans online, there are quite a number of options you can choose from. Here are some of the small business loans with no credit check that you can consider,
Crowdfunding is among the most popular options for business owners who want to introduce a new product or service in the market. This business funding option requires support from friends, family members, individual investors and even your customers. These groups of people will help raise the capital you need to start your business. There are several crowdfunding platforms to help business owners conduct online campaigns and get support through social media marketing and email marketing. Besides, your business will benefit from getting feedback from masses which will help you make the best business decisions. If you plan to have a crowdfunding campaign for your business, here are the 3 options that you can consider,
In this category, the business does not offer any incentives to the contributors. It is usually reserved for community projects, disaster relief and nonprofits
This offers a reward to backers when they contribute to your business. The reward can be a product or service offered by the company or a special gift.
Here, backers will support your company by buying shares. They will then receive a return on investment for their contribution.
Small business grants
Small business grants are among the best ways to fund a business. Unlike business loans, you will not have to worry about paying the money back. Borrowers only need to qualify for the grants, which are offered for all types of business. You can find small business grants from federal, state and local governments.
Microloans and non-profits
The loans are provided specifically to entrepreneurs who operate a small business and those that come from a disadvantaged background. In this option, borrowers are not required to demonstrate their creditworthiness which means that poor credit history is not a hindrance for you to access the loan. Microloan lenders do not advance the money to make profits. They offer the loan with the aim of helping struggling communities and marginalized groups.
Friends and family
Well, when everything else fails, you can consider requesting funds from family and friends. If they believe in you, they will in no doubt contribute to support your business. You only need to explain to them the type of business you want to venture in and demonstrate its profitability.
Business credit cards
If you have a poor credit history and are afraid that you will be denied a loan by traditional lenders, you can opt for a business credit card. This can be ideal for startup business since issuers put more focus on personal credit score of the borrower rather than the business credentials when approving the loan.
Can you get a business loan with poor credit from online lenders?
If you want to get a business loan online with poor credit, you might assume it to be an overwhelming process. However, this is not the case. There are several online lenders who provide bad credit business loans, and you only need to submit an online application. Actually, the online application process is much faster and straightforward compared to working with conventional institutions. It has less paperwork process and a faster approval rate.
With the current economic climate, it can be quite difficult for entrepreneurs to get a business loan if they have a poor credit rating. Even if your business is running smoothly, chances are that your application will be rejected by traditional lenders. However, there are also direct lenders who are willing to provide bad credit business loans. You, however need to do background research and come up with a reputable lender who will not take advantage of your situation.