It’s a good idea to think about rebuilding both your business credit history and your personal credit score. That way, you can easily apply for a business credit card, a business loan - that doesn’t require a cosigner, and which comes with better rates and rewards.
Not in the traditional sense. But with a little bit of creativity, you can come up with the capital you need to start your business. And even if you can’t quite draw up a small business startup loan with no credit check, by spending responsibly with a secured credit card, your road to accessing small business startup funding will be smooth, even if this funding does require a credit check.
Lenders will typically consider your personal credit in the following tiers. Let’s see which tier your credit falls in and what this means for your business loan options:
700 or Above
For starters, if you’ve got a credit score of 700 or higher, then you meet the minimum credit requirement for most any kind of business funding out there—even the most difficult, like SBA loans or bank loans.
650 to 700
If your credit score falls somewhere in between 650 or 700, then you’re still in pretty good shape. In fact, after you get a bit of business history under your belt, if your business is in good financial shape, you might still be able to qualify for an SBA loan with a credit score in this range.
620 to 650
When your credit score starts to fall into the 620 to 650 range, that’s when your options become a bit limited. That said, with a score like this and after a few months of business, you could still qualify for a medium-term loan from an alternative lender.
500 to 550
With a credit score that falls somewhere in between 500 and 550, then you’ll definitely have a bit of trouble qualifying for a loan. That said, though your credit score won’t help you in qualifying, that doesn’t mean you don’t have options. Especially if you get a bit of business history under your belt, and you have some business financial stats to show for it, then you could still for certain types of short-term or secured funding.
Below 500
This is where things can get tricky. If you’ve got a credit score that’s below 500, your options for funding your business will be seriously limited, and often less-than-ideal. If your score falls within this range, we suggest you take time to improve your credit history before taking on any business funding.
If you’re afraid you have “bad credit,” make sure you understand the FICO score ranges before deciding that no lender would want to work with you. You might be underestimating your credit score or your loan options.
If you’re worried about dinging your credit, there are some lenders that just do a soft credit pull—meaning it won’t affect your credit score.
All in all, when a lender decides whether or not to lend to your business, they’re evaluating the risk that your business will have to default on any loan they end up extending you. If you’ve got no business history to prove that your business can run smoothly and no credit score to prove you’re financially responsible, how can a lender know that you’ll eventually pay off your debt to them?
While, of course, every small business owner deserves the benefit of the doubt, it’s not necessarily a feasible reality when it comes to traditional business financing. As result, you’ll have to seek alternative forms of financing if you want to find small business startup loans with no credit check.
Even if your business is brand new, you can still find alternative sources of small business funding with no credit check.... but you’ll likely have to get creative to find them.
There are a few alternative lenders, that offer invoice financing with no credit check. However, because it requires outstanding invoices to finance, this type of funding wouldn’t be an option if you’re just starting up with no orders to fulfill yet. You’ll need at least 3 months of business history along with an outstanding invoice under your belt in order for this lender to be an option.
A large number of us don't significantly consider our credit scores until the point that we have to take out an individual or business loans. At exactly that point do we comprehend the ramifications of our financial assessment on purchasing a home, getting an auto, or notwithstanding beginning our dream business.
So now you are wondering... "Where would i be able to discover independent company startup loans, with no credit checks required?"
For traditional financing, the short answer is pretty much no.
That said, with the state of small business lending as it is, there is a whole world of choices beyond just traditional financing at this point. And some of these won’t require business history or a credit check.