A small business loan that has no credit check is the best option for you if your business needs additional capital. How do you avoid being subject to a credit check and navigate the loan process? Is there a lender that will lend money to small businesses without checking their credit history?
You might have a low credit score and don’t believe you will be eligible for financing. You may also have excellent credit and don’t want lenders to inquire about your credit report.
Many financing options do not require credit checks, regardless of your reasons. Continue reading to learn more about the best loans for small businesses.
No Credit Check Business Loans
These are the best business loans that don’t require a credit check:
- American Express Working Capital Terms
- Square Capital
- PayPal Working Capital
- Kiva U.S.
- Shopify Capital
These no credit check business loans do not require a hard or soft credit pull. BFN rates the lenders highly (4.5 stars).
1. American Express Working Capital Terms
American Express offers several types of financing for businesses. One of these is American Express Working Capital Terms. This can be used to pay vendors.
You must be an AMEX cardholder to apply for Working Capital Terms. You must also have been in business for at least 24 months and earn 0,000 annually.
American Express won’t run a credit check on you when you apply for a working capital loan. Instead, it uses the information that it holds about you as an AMEX customer.
AMEX Working Capital loans are a unique type of loan that is used to pay vendors. The loan proceeds are not sent directly to you as the recipient.
This financing is an excellent option if your vendors do not accept credit cards and you have difficulty paying the bills.
Be aware that AMEX does not run credit checks on you when you apply. However, you will need to have good credit to be approved for an AMEX Business Card.
The loan term can be 30, 60, or 90 days. These short-term loans are available in amounts between $500 and $150,000. Fixed fees are 0.6% to 5.25%.
You do not have to repay the loan in monthly installments. Instead, the entire amount is taken from your bank account at each end of the term.
- No origination fee
- Quick funding (1 to 2 days).
- Excellent borrowing rates
- Good customer service
- Only for AMEX Business Card Holders
- Only used to pay vendors
2. Square Capital
Is your business using SquarePOS to market? A Square Capital loan might be available to you. Square Capital loans are short-term loans that can be repaid as a percentage of your credit card sales.
Square doesn’t run credit checks to determine your eligibility for a loan. Instead, Square considers your Square account health, including a mix of returning and new customers. They also look at your ability to process at least $10,000 per year.
Square Capital small business loans are available from $300 to $250,000. There is no fixed term, but you have to repay the entire amount in full within 18 months. This type of financing is quite competitive, with factor rates ranging from 1.10-1.16.
Although you cannot apply for a Square Capital loan, you can look at your Square seller dashboard to see if there are any loan offers.
Square continuously checks the eligibility of merchants for loans. The more you sell Square, the greater the chance that Square will offer you a loan.
- Excellent borrowing rates
- Restrictions on borrowing
- Convenient and fast
- For loans below $75,000, no collateral is required
- Only for Square sellers
- Merchants cannot apply for offers, and they can only accept them
3. PayPal Working Capital
Many businesses use PayPal to accept payments online or in person. You may be eligible for a PayPal Working Capital loan.
You must have a PayPal Premier or Business account and have processed at least $15,000 in PayPal sales annually if you have a Premier or Business PayPal account. Premier accounts can only be used for up to $20,000.
A PayPal Working Capital loan application does not require credit checks. PayPal will consider your PayPal sales volume and your account standing to determine if you qualify for a Square Capital loan.
Similar to Square, PayPal Working Capital loans are repaid with a fixed fee structure. This is a percentage of your daily PayPal transactions and a maximum term of up to 18 months.
PayPal will lend you up to 35% of your annual PayPal sales. This cap is $125K for the first two loans and $200K for subsequent loans.
There are many factors rates, ranging from 1.01 to 1.58. The application process for these no credit check business loans is quick and straightforward. Loans can be approved within minutes.
- Only PayPal sellers
- High borrowing rates can result
4. Kiva U.S.
Kiva crowdfunded loans for businesses allow you to take out a zero-interest microloan that you will repay over six to twelve months.
Kiva doesn’t require credit checks. Once your application has been approved, you will be granted a private funding period of 15 days.
You will need to get between 5 and 25 family members and friends to support your fund during this period. Once you have reached your lender target, your campaign goes live to the public.
You can also interact with potential investors to crowdfund your loan in just 30 days. Once all funds have been raised, your loan will be sent to PayPal within one week.
The maximum amount that you can borrow depends on your business’ age. You can only borrow $1,000 for business ideas. You can borrow up to,000 for businesses that are less than three months old. The maximum amount you can receive is $15,000.
- No interest
- Repayment terms for long periods
- Monthly payments
- Ideal for startups
- Low borrowing requirements
- You must solicit lenders through your personal network
Benetrends is the most experienced provider of ROBS (Rollovers As Business Startups). Benetrends is the creator of the Rainmaker Plan.
This plan allows you to roll over your 401(k) IRA retirement account to finance a business without any tax penalties. Benetrends has been a preferred choice for franchise financing since 1983.
You must have at least,000 in eligible retirement funds to be eligible for the Benetrends Rainmaker Plan. Benetrends offers a simple four-step process that will help you get your funding within ten days.
To start your ROBS plan, Benetrends will charge a $4,995 setup fee. A $139 monthly maintenance fee is required after this.
Benetrends will provide audit protection, compliance, and a team of certified in-house professionals to assist you with creating and maintaining your plan.
- Startup friendly
- Alternative to a business loan
- There are no early withdrawal penalties or upfront taxes
- Includes legal compliance
- It’s risky not to have additional retirement savings
- Setup fees and ongoing monthly fees required
6. Shopify Capital
Shopify Capital allows eligible businesses to sell using Shopify eCommerce or Shopify Point-of-Sales. They can get a cash advance of up to $200,000. This depends on the sales volume and risk profile of your business. There are no requirements for credit or income.
Shopify Capital loans are repaid in a percentage of your daily sales. The total amount is due 12 months later. Shopify Cash Advances have no fixed repayment terms, as long as your daily remittance is paid from your Shopify account. Shopify Capital factor rates will be either 1.1 or 1.13.
Shopify Capital financing is not available to you. Shopify monitors the accounts of its users and makes offers to those who are eligible for financing.
- High borrowing amounts
- Competitive rates
- Restrictions on borrowing
- No repayment deadline for cash advances
- Shopify sellers only in certain states
- Shopify will contact qualified candidates.
There are other options for business financing that does not require a credit check
There are other financing options than business loans without credit checks.
You can raise funds for your startup online by using a crowdfunding campaign. It works like this: Business owners, often startups, offer investors incentives or perks for investing. Many times, equity can be offered in exchange for investment. Other businesses offer investors a reward, such as a reduced price or free product.
Crowdfunding is an excellent alternative to traditional business loans. Most crowdfunding platforms don’t require you to have a certain amount of business experience, personal credit or business credit, or an annual income to launch a campaign.
Equipment financing allows you to get the money you need to buy long-term equipment. This includes heavy machinery and company vehicles. Equipment financing companies usually require a good credit score, but sometimes, even with poor credit, you may still be eligible for an equipment loan.
Your credit score does not play as big a role in equipment financing because the lender may repossess your equipment if you default.
Equipment leasing may also be possible with poor credit or without any hard credit checks. To learn more about the differences between these types of equipment financing, click here.
You might consider selling unpaid invoices to third parties if your company has many outstanding invoices. This is called invoice financing. Factoring companies don’t care about your personal credit score. They base their decisions on the creditworthiness of your customers, not yours.
Invoice factoring companies can check your company’s credit while others only check the credit history of customers buying invoices from you.
Even if you have a low credit score of 500s, many companies will approve you. Invoice financing can be a similar option, but it has minimal credit requirements or none depending on the lender. Learn more about the differences.
A business loan is a loan you don’t have to repay. Business grants are even better because they don’t require you to have a credit score, be in business for a certain amount of time, or meet revenue requirements.
Although there can be a lot of competition for these grants, it is worth checking to see if you are eligible.
Government agencies, private businesses, associations, and other organizations may offer business grants. Because most grants for small businesses are regional, the best place to look is in your local business community.
Inquiries about Hard VS Soft Credit
When applying for loans, it is essential to understand the differences between hard credit and soft credit. Although none of the six mentioned lenders require either a soft credit inquiry or a hard credit inquiry in this post, small business lenders often conduct both at different points during the loan approval process.
Your credit score is not affected by a soft credit inquiry or soft credit pull. Lenders use soft credit pulls to verify your identity and give them an overall view of your creditworthiness.
A soft credit check is typically performed during prequalification to ensure that you meet all the lender’s requirements. The lender will be able to see your credit score. However, it won’t affect your credit score nor show up on credit reports.
Your credit rating will be affected by a hard credit inquiry or hard credit pull. This will also appear on your credit report. Lenders can get a better, more detailed view of your credit history by pulling your credit report.
Lenders can use this information to determine whether you are approved for a loan, what interest rates or fees you will pay, and if the collateral is needed. Hard credit checks are usually done after you accept a loan proposal.
A hard inquiry is usually only done during the final underwriting stage before funding. This means that you can apply for multiple online loans and get pre-approved without having to go through a credit check.
Online lenders will usually inform you that your credit score will not be affected by the application.
You don’t have to be afraid to apply for loans that require soft credit checks. You will only need to pass one hard credit check if you are pre-approved for multiple loans. Make sure the lender states that they will not pull your credit report when you apply.
What to do if you are unable to get a no credit check business loan
You may not be able to obtain a loan without credit checks. This could happen if your income, time in business, or any other criteria aren’t met. There are still options.
- Grants are available for those who cannot get loans.
- Investors to Look For: Investors may be interested in equity shares in your startup if it is innovative. You can search for investors via equity crowdfunding or seed financing.
- You can agree to a soft credit screening: A soft credit check will not show up on your credit report. Lendio, an online service that matches business loans with potential lenders, will run a soft credit assessment to determine if you are eligible. You can then at least look into your options.
- You may be eligible for a business credit card if the amount you need is not too large. The best business credit cards will require excellent credit. However, credit cards are for people with bad credit, which can help you build credit and finance your business expenses.
Although it is possible to get a business loan without going through a credit check, your options are limited. Low-interest loans from traditional business lenders will require a credit check before they approve a loan.
Although it can seem difficult to get a loan for your business without a credit check, it is possible. Be aware of the additional fees, higher costs, and other considerations before applying for these loans.
You want to get the lowest possible loan and maximize your return on investment so that you can start or grow your business without incurring unnecessary debt.
I am David, economist, originally from Britain, and studied in Germany and Canada. I am now living in the United States. I have a house in Ontario, but I actually never go. I wrote some books about sovereign debt, and mortgage loans. I am currently retired and dedicate most of my time to fishing. There were many topics in personal finances that have currently changed and other that I have never published before. So now in Business Finance, I found the opportunity to do so. Please let me know in the comments section which are your thoughts. Thank you and have a happy reading.