Getting a small business without having to face a credit check is possible just do not expect to get the financing from a traditional lender, like a bank.
Approving financing for a speculative business without collateral and good credit is something banks do not want to risk. Banks consider merchants in these categories as “high risk,” which basically means a number of factors, such as a reputation for excessive chargebacks or their industries, they may be less likely to pay back the money borrowed.
Therefore, the best way to get a small business loan no credit check I to apply to an alternative lender. The amount of money you may be eligible to borrow may be smaller, the terms may be stricter, and the interest rates may be higher, but it does give you the money you need.
Other No-Credit-Check-Required Financing Options
In addition to obtaining a loan from an alternative lender, also consider supplementing with these options that won’t ding your credit.
Microloans and Nonprofit Financing
Small businesses owned by those with disadvantaged backgrounds may qualify for financial assistance from a charitable organization or a microloan. If you have limited credit or bad credit, many times these funding options are still possibilities because they aim to help these groups succeed instead of turning profits.
Business Credit Cards
Many with poor credit think that business credit cards are not options. However, they may not be bad ideas, if your business is a startup. In many cases, business credit cards are approved based on personal credit scores, making them options for those who continue to build up their business credentials. In addition to being fairly accessible, they are good to have if an emergency arises.
Crowdfunding
Raising funds through crowdfunding platforms, like GoFundMe and Kickstarter, is a newer way to get money you need to develop and unveil a new service or product. The genius behind crowdfunding is it allows you reach potential investors through email and social media. Also, some entrepreneurs have found talking about goods and services in a public forum help them fine-tune their concepts.
In general, there are three types of crowdfunding: donations-based, equity-based, and rewards-based.
- Donation-based crowdfunding offers no incentive to investors, and often is used to raise funds for disaster relief or local, community-based projects.
- Equity-based crowdfunding gives investors opportunities to become partners in the companies seeking the funding. Basically, they give seed money in exchange for some of the profits.
- Rewards-based crowdfunding gives investors a gift or another type of reward to thank them for their funds.
Small Business Grants
Municipal, state, and federal governments award business grants for community projects, revitalization efforts, and other specific efforts. Since they are grants, the funds do not need to be paid back and they do not require a credit check. Most importantly, it is a very competitive form of funding.
In Conclusion
Whether you apply for a small business loan with no credit check or go after one and other supplemental funding sources, they money you need is out there if you look.
When you are ready to apply for a loan without a credit check, then consider First American Merchant (FAM). FAM has experienced working with businesses with bad credit or no credit at all, and offers the most competitive rates and the best services to merchants of any type and size. Instead of analyzing your credit score, FAM evaluates the amount of cash flow in your business.
What are you waiting for? Fill out an online application today.