If your credit isn’t the best, you may be able to get a business loan with no credit check. But small-business loans with no credit check often come with hefty fees or high interest rates — especially if approval is "guaranteed." Be wary of such products; reputable lenders won’t guarantee you’ll get a small-business loan without first checking your credit.
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If you're unable to qualify for business financing because of your credit, these providers may be useful.
Business loans with no credit check
Some alternative online lenders may not do credit checks for business loans. Online loans tend to have looser requirements and deliver funds quicker than traditional bank loans do, but they may charge higher interest rates and fees for that convenience.
Here are a few options from major lenders.
PayPal Working Capital
The PayPal Working Capital loan doesn’t require a credit check; instead, it considers your PayPal account history. You need to have a PayPal Premier or Business account for at least 90 days to qualify.
The loan offers flexible payments, and funding can arrive in minutes. The fixed fee you pay at application is based on your loan amount, selected repayment percentage and your business's PayPal account history. You dedicate a portion of your sales to automatically repay the loan.
American Express Business Loan
The American Express Business Loan ranges from $3,500 to $75,000. Repayment terms range from six to 36 months. The catch? Only current AmEx Business Credit Card owners who meet certain qualifications can qualify. American Express does a soft credit check when you apply, which doesn't have an impact on your credit score.
» MORE: What is a hard credit inquiry?
Bluevine
If your business is organized as a corporation or limited liability company, Bluevine won’t perform a hard credit check when you apply for a loan. It will run a hard credit pull for businesses organized as general partnerships or sole proprietorships, but only after you accept a loan offer. Bluevine offers business lines of credit.
Pros and cons of business loans with no credit check
There are some obvious benefits to business loans with no credit check, but there are also some downsides.
Pros
- Access to funding even with bad credit.
- Making payments on time may build your business credit profile.
- May be easier to borrow in the future if you pay back this loan on time.
Cons
- No-credit-check loans can come with higher interest rates.
- May pay additional fees.
- You can end up spending a lot on interest, which may outweigh the benefits of the loan.
» MORE: How to get an SBA startup loan
Are there guaranteed startup business loans with no credit check?
Getting a startup business loan can be difficult — but even more so if your credit is less than ideal. Some lenders promise “guaranteed” startup business loans, but tread lightly around these offers. Credible business lenders are unlikely to approve a startup loan without first checking your credit.
- Lenders check credit to determine the risk of lending you money. If you have a good personal credit score (a FICO score at or above 690), it can be easier to qualify for business financing at favorable terms and interest rates. If your business doesn't have an established track record, it can be challenging to secure a startup business loan with bad credit.
- Some lenders perform a “soft” credit pull when you apply. This isn't the same as not doing a credit check. Soft pulls let a lender know if you’re likely to qualify but won’t ding your credit score. So if your application isn’t approved, at least you won’t have to apply elsewhere with a lower score.
- Business loan lenders often evaluate potential borrowers based on the “five C’s of credit” — capacity, capital, character, collateral and conditions. “Character” includes your credit score, and if a lender isn’t going to take that into consideration, it’ll likely weigh other factors like your cash flow more heavily.
What are other options for business funding?
If you’re struggling to secure a business or startup loan due to your credit, you may want to consider other financing options that don’t necessarily require a good score, such as:
- Borrowing money from friends or family.
- Launching a business crowdfunding campaign.
- Applying for small business grants.
- Taking equity investments in your startup.