How to Get a Business Loan With No Credit Check

You need experience to land a job, but you can’t land a job without experience — most of us face this irony at some point. 

The same is the case with getting a loan to start or expand your business. 

You need that money to build a sound financial history (and to meet the business expenses, of course), but you can’t borrow money from a bank unless you have a good credit history. Pretty frustrating, right?

But don’t worry too much. There are still ways to get a business loan with no credit check to fulfill your obligations. This guide will list the best no-credit check loans that business owners can get so they always have alternatives to conventional bank loans. 

Keep reading and let’s see how to borrow money with no credit checks!

Business Loan No Credit Check Methods.

When starting a business, the biggest roadblock is getting enough funds to get the ball rolling. To make things more difficult, a solid credit score is a prerequisite for most banks. But if you don’t have that, don’t give up on your dream yet. Here’s how you get a business loan with no credit check:

1. Alternative Lenders

If traditional banks have turned you down due to credit concerns, alternative lenders can help. These lenders operate differently than the standard banking system and focus on your business’s performance rather than your credit score.

These lenders check your business’s cash flow and revenue trends rather than your credit score to get a better understanding of where your business currently is. For instance, if your business has stable monthly sales and a solid customer base, they see this as a positive sign of your ability to repay a loan. They’re interested in how your business is doing right now and where it’s headed, and not so much on the history youve built to date.

Say you own a small café with steady foot traffic and sales but have a low credit score due to past personal financial issues. An alternative lender could offer you a loan based on your café’s performance, allowing you to expand or upgrade equipment without the hurdle of a credit check.

If you want to go down this path, research reputable alternative lenders that specialize in your industry or business size. Then, prepare important documents like financial statements, bank statements, and a detailed business plan that outlines your goals and strategies. 

The advantages here are clear: faster approvals and more flexible requirements. But be mindful that interest rates will be higher than those of bank loans.

2. Merchant Cash Advances

A merchant cash advance hands you a lump sum of cash in exchange for a percentage of your future sales. So, if your business processes a good amount of credit or debit card transactions, a merchant cash advance may be a good option for you.

Here’s how it works in most cases: you receive upfront funding, and the lender automatically deducts a fixed percentage from your daily credit card sales until the advance is repaid. While this is not always the way a merchant cash advance is structured for repayment, this means repayment adjusts with your sales volume — on slower days, less is taken out, and on busier days, more is repaid.

Suppose you run a retail store that needs immediate funds to stock up on inventory for an upcoming holiday season. An MCA can provide the cash you need without a credit check, and repayments will align with your daily sales.

Fundo is an incredible cash advance platform for business owners in a time and money crunch. That’s because the application and approval process with Fundo don’t wear you out. It doesn’t matter if you’re a gig worker or run a small business; if you make at least $1,500 a month and have been working for the past three months, you can get a cash advance from Fundo. And the best part is, if all is clear, your advance might get approved the same day — no long wait, no hefty documentation, and no credit checks.

3. Invoice Financing

Invoice financing helps you unlock cash tied up in unpaid invoices. If your business extends credit to customers and experiences delays in payment, this financing can improve your cash flow.

In simpler terms, you sell your outstanding invoices to a lender at a discount. The lender gives you a percentage of the invoice value upfront — usually around 80-90%. When your customer pays the invoice, you receive the remaining balance minus the lender’s fees.

For instance, if you run a small manufacturing company and are waiting on large payments from clients, invoice financing can provide immediate funds to cover operational expenses or invest in growth opportunities.

The main advantage is that approval is based on your customers’ creditworthiness, not yours. Since the invoices serve as a guarantee, your credit history isn’t a primary concern for the lender.

4. Equipment Financing

Equipment financing enables you to acquire the machinery or tools your business needs by using the equipment itself as collateral. Using the machinery as collateral reduces the lender’s risk and eliminates the need for a credit check.

For example, a landscaping business may need new mowers and tractors to take on more clients. If they get the equipment financed, they can expand operations without a major upfront cost.

Once you identify the equipment you need and get a quote from the vendor, you approach a lender who specializes in equipment financing. If the lender sees potential in your business, they’ll purchase the equipment for you. You set up the machinery and put the business on wheels. After that, you repay the loan while using the equipment to generate revenue.

5. Crowdfunding

Crowdfunding helps you raise capital by collecting small amounts of money from a large number of people, generally via online platforms. This method, besides giving you money to run the business, also builds a community which can later turn into paying customers.

Here are the are two main types of crowdfunding you can pick from: 

1. Rewards-Based Crowdfunding: In a rewards-based program, you offer backers a product or service in return for their support. For instance, if you’re launching a new gadget, early contributors can receive a discounted or special edition version.
2. Equity-Based Crowdfunding: Equity-based crowdfunding is more stable because you have actual investors on board who receive a small share of your company in exchange for their investment. This approach can help you raise larger sums, but you’ll have to share ownership with the investors, 

For example, a new food truck business can use crowdfunding to raise funds for their vehicle and equipment. They can either offer backers free meals or the opportunity to help design the menu, depending on the investment’s scale. 

If you want to launch a crowdfunding campaign, pick a platform and create a compelling story that explains your business idea. It should also discuss your funding needs and what backers will receive in return. 

Don’t Let Bad Credit History Hinder Your Business Idea

A bad credit history shouldn’t stop you from bringing your business to life because many financing options don’t rely on your credit score.

So, do good research, gather all the necessary documents, and be prepared to showcase the strengths of your business. Also, many successful entrepreneurs and big brands have faced similar challenges and found ways to secure funding without a perfect credit score.

With determination and the right resources, you can overcome this hurdle and move forward with your business plans. 

If you want a fuss-free way to secure business capital, reach out to Fundo and your funding will be sorted in no time. We don’t believe in long waits and crazy credit checks; we believe in your potential.

 

FAQs

What are the risks of merchant cash advances?

Merchant cash advances offer quick funds but may carry high costs due to steep fees and interest rates. Sometimes, these rates can even double the repayment amount, so pick a lender carefully. Also, these loans impact daily cash flow, as repayments are deducted from daily sales, which can strain finances during slow sales periods. 

Are there government programs for businesses with no credit?

Yes, there are government programs to help businesses with limited or no credit history. Agencies like the Small Business Administration (SBA) offer loan programs that focus on the viability of your business rather than your credit score. The SBA’s Microloan Program provides loans up to $50,000 to help small businesses start and expand. 

What is the difference between secured and unsecured loans?

Secured loans require collateral, like property or equipment, which the lender can seize if the loan is not repaid. Unsecured loans do not need collateral but depend on the borrower’s creditworthiness. Due to the higher risk to lenders, unsecured loans have higher interest rates and tougher approval conditions.