The lending industry leans heavily on credit history, making it difficult for some business owners to secure financing. Some have a poor personal credit history or no business credit at all, while others may not want to tarnish their credit report with multiple lender inquiries. Fortunately, some lenders do not require a credit check or use soft pulls that do not negatively affect your score. These alternative sources of funding include working capital loans from your payment processor, invoice factoring, merchant cash advances and equipment loans.
If you have bad credit or no business credit, the best option is to find a lender that specializes in bad credit business loans. These lenders may consider other factors like your business performance or revenue and typically offer a shorter term than traditional business loans. They also tend to have a higher interest rate.
In some cases, the lender will require a collateral security to ensure repayment. This may be a car or inventory, but it could also be your home. In this case, it’s essential to make sure you can afford the payments before taking out a secured business loan.
Another option is to seek a short-term loan that is repaid within 1-3 years. These loans are less dependent on your credit, and you can qualify with a FICO score as low as 500. They have high interest rates, but they can be a quick way to get the funds you need.
Other options for bad credit business loans include online lenders that offer fast approvals and a variety of different funding types. They often do a soft credit pull and match you with the best lending partners based on your specific needs. These lenders can help you avoid dings to your credit report and provide the capital you need to grow your business.
Lastly, crowdfunding platforms can be a great way to raise money for your business. They are similar to GoFundMe, but you can borrow up to $250,000 based on the popularity of your campaign. These platforms are a good choice for small businesses that don’t have much of a business credit history and need to raise a large amount of money quickly.
There are several business financing alternatives that do not require a credit check or use a soft pull, but they have varying terms and requirements. Some of them are based on your personal credit, while others are based on the creditworthiness of your clients or the value of your invoices. Some of them may require a downpayment or have strict usage restrictions, so be sure to carefully review these options before choosing one. no credit check loans for business