Small business loans with no credit check can be hard to find. Most lenders require good personal and business credit or collateral.
But, there are still some options out there. Here are six of our top picks. Some of them are based on your business invoicing and income, like Fundbox, while others (like PayPal Working Capital) are only available to users of that company’s point of sale platform.
1. Fundbox
Fundbox is a lender that offers small business lines of credit, with or without a personal credit check, with repayment terms up to 12 months. The company uses big data analytics and predictive modeling to automate its loan process, and can provide a decision in minutes. If approved, funds are usually deposited into your business bank account within two business days. Customers appreciate the fast, easy application and funding process, as well as the transparent pricing and lack of extra fees like origination, draw, or maintenance.
Unlike many online lenders, Fundbox is willing to lend to businesses that have less than perfect credit scores, and even accepts newer business startups with just six months of revenue history. Borrowers also enjoy the flexibility of a revolving line of credit, which automatically replenishes as you pay back borrowed funds. The maximum credit limit is $150,000, and the company also offers a short-term term loan for some clients.
Although most customers rate Fundbox highly, there are some complaints about the high cost of capital and communication issues. Additionally, the company primarily focuses on lines of credit, with limited other financing options, and its minimum sales and credit score requirements may exclude some small businesses. However, Fundbox has excellent customer service and is one of the few online lenders to have an extensive library of FAQs.
2. US Business Fund
If you’re looking for a business loan that doesn’t require a credit check, look no further than US Business Fund. This company offers several financing options, including equipment and Small Business Administration loans, working capital solutions, and a merchant cash advance. Their professional staff will find the best financing solution for your business and will help you get approved quickly with minimal paperwork requirements.
Another option for a small business loan that doesn’t require a check of your personal or business credit is Square Capital, which offers funding to merchants that use their point of sale software and mobile payment platform. This type of financing is based on the future credit and debit payments that your business processes daily. However, it’s only available to those who already use Square, and its interest rates are higher than other options.
Another alternative to traditional loans is debt crowdfunding, which allows investors to lend money directly to a business. The company Kiva has been helping entrepreneurs connect with potential lenders since 2005. The company uses a social underwriting model to evaluate applicants and determine which ones will receive a loan. Its loans typically have lower minimum credit scores and revenues than other options, and its application process is easy to navigate. But the company has received multiple complaints from customers about spamming them with unwanted emails.
3. Lines of Credit
A line of credit differs from a business loan in that the lender provides you with access to a predetermined amount of funds that you can borrow against on an as-needed basis. This can be used to fund inventory or operating expenses, and you only pay for what you use. Typically, this financing option has lower credit requirements than a traditional term loan and requires less detailed business financials. However, this type of financing may also have higher interest rates and fees. In some cases, the lender may report your payments to the credit bureaus, which can help build your business’s credit rating if you are careful with repayment.
A secured line of credit often requires collateral, which could include physical assets like equipment or inventory, or accounts receivable. You may also be asked to provide a co-signer, which is an individual who agrees to make loan payments if you cannot. These additional safeguards reduce the risk for the lender and can help you qualify for this type of small business loan with bad credit.
Nav is dedicated to providing you with the information you need to find the right financing for your small business. If you are interested in learning more about the best business loans for bad credit, contact a funding specialist today. The right loan can help you grow your business and achieve success.
4. Merchant Cash Advance
A merchant cash advance, or MCA, is a type of business financing that lets small businesses borrow a percentage of their future credit card and debit card sales upfront. This loan does not have a specific interest rate but rather a factor rate, which is determined by the lender after analyzing your business’s sales data and financial capabilities.
Many small business owners choose to pursue a merchant cash advance for several reasons, including:
Buying Inventory
Having enough stock on hand is critical to maintaining your business’s revenue, and purchasing inventory ahead of slow periods or seasonal dips can help ease the impact on your business. That’s why restaurants and eateries, as well as retailers, often take out a merchant cash advance to secure capital for these purchases.
Expanding Your Business
If you want to grow your business, a merchant cash advance can provide the capital needed to purchase new equipment or rent additional space. Additionally, you can use this loan to pay employees and other costs that might otherwise strain your cash flow.
The best merchant cash advance lenders have fast turnaround times, and you can typically apply for this loan with minimal paperwork online or over the phone. Lendio and Funding Circle are popular lending marketplaces that can expedite the process by finding lenders that meet your requirements, and National Business Capital also offers an easy application.