27% of businesses surveyed by the National Small Business Association (NSBA) reported they weren’t able to receive the necessary funding for their business. According to the NSBA Small Business Access to Capital Study, 20% of small business loans are denied because of business credit.
Based on a 2015 survey in the field, of small business owners surveyed, 45% weren’t aware they have a business credit score. 72% have no idea where they could find information on their business credit score. 82% have no idea how to interpret their score.
“Credit Check” and “No Credit Needed”
If you’ve decided to apply for financing, your credit can generally be affected in 2 ways. The traditional way of financing usually requires a “Credit Check,” which means a hard inquiry will be put on your account, and lenders will review your credit score and credit bureau reports to figure out whether you’ll be able to pay back the money borrowed.
The 2nd way is known as “No Credit Needed.” In this case, your eligibility for financing will be determined based on other factors.
“Bad Credit” and “No Credit”
What about “Bad Credit” and “No Credit?” If you have bad credit, this indicates you’ve already established credit over time but have some derogatory marks on your credit report. These may stem from late or non-payments, accounts that have gone into collections, or even bankruptcy.
If you have no credit, this means you haven’t established a history of credit yet, so you don’t have anything positive or negative on your credit report that lenders can take into account. Credit scores generally range from 300-850. Having no credit means you don’t have a credit score that lenders can take into consideration.
Because of bad or no credit:
- Your loan and credit applications can be denied
- You can be required to pay high-interest rates on loans and credit cards
- It can be difficult for you to get approved for a new apartment/home
- You can end up with paying security deposits for utilities
- You can have difficulty getting a cell phone contract
- You can receive endless calls from debt collectors
- You can end up with paying higher insurance premiums
- It can be difficult for you to purchase a new car
- It can be challenging for you to start your own business
What Is “No Credit Check?”
“No Credit Check” can be found rarely. It means the lender isn’t going to check your credit score or make any inquiry into your history of applying for credit or making payments.
Thanks to firstamericanmerchant.com, you can apply for business loans no credit check and easily get approved for them. First American Merchant is a reputable business loan provider and high risk payment processor that has an A+ rating with the BBB. As a respectable alternative online lender, FAM offers exceptional business funding opportunities and the lowest possible rates to merchants of any type.
As you see, “No Credit Check” differs from “No Credit Needed” in that the latter means the finance company isn’t going to rely on your credit score and is ready to accept applicants with mediocre, poor, or even no credit.