Published By Faith Stewart at October 10th, 2018
Running a business can be like trying to launch a rocket. You work day in and day out to ensure it blasts off without a hitch. You want it to go and you want it to go fast. It almost always takes financing to make that happen however. Financing in some form is necessary for almost every part of running a business. This is true from start up to expansion, and often several steps in between. But what if you have bad business credit, or just as bad, no business credit? That is where no credit check business loans can come in handy.
Does such a thing even exist? Maybe not in the form you imagine, but it is possible to get funding without a credit check. It just may take some creativity. When you blast off a rocket, you have to use something to light the fuse. Sometimes you have what you need, and sometimes you have to scramble for a match. There are even times when it seems you are going to have to rub two rocks together. Sometimes it takes more work than the others, but if you work hard and know how to fly the ship, you can still end up in outer space.
How on earth do you light a fuse without a spark? You don’t. You find a way to make a spark. If all your credit gas is gone and your torch won’t work, then you have to try to find a dry match. Or it could even be those rocks we talked about. It won’t be easy, but then, nothing worth it ever is.
This is where your search begins. It’s a big box and there are a ton of options, but only a few truly require no credit check
Kiva offers peer to peer micro loans with no interest and no fees. The maximum borrowing amount is $10,000, and the term length is 6 to 36 months. You can repay by month, or in a lump sum at the end of the term. You do have to create a thorough business profile. In addition, you will need to loan $25 to another business. The last requirement is to recruit a certain number of lenders from your own network of friends and family. Typically, that number is 5, but there are exceptions. It’s all free however, and these are absolutely no credit check business loans.
If you are looking to light the fuse and launch your business to the next level, this could be the dry match to set it off.
These are not technically no credit check business loans, but they are definitely a no credit check funding options. I would liken this to rubbing those rocks together. It may or may not work, but it is definitely worth a shot. The most popular crowdfunding venues are probably Kickstarter and Indiegogo.
While there are many details to attend to, the basic premise is potential investors can read your profile and invest if interested. There is no credit check, but you do have to set a goal. You do not get your money unless you reach your goal.
Most of the ins and outs of the standard crowdfunding sites are the same, except for a few minor details. The biggest differences between Kickstarter and Indiegogo is that with Indiegogo, you can choose to take your money as you go. Also, a flex funding option is available.
This is a great option for a startup, and crowdfunding itself is an innovative idea. However, if you are an already existing business, or you do not have an attention getting idea, it won’t work.
For businesses that have in the game a while, this might be a better option. It does require open invoices. Assuming you have those, you can sell those invoices to a factoring agency and get your cash immediately. Though you will collect less than the full value, you will get the money right away. So it’s a lot like no credit check business loans.
This is another great option for an already established business that has regular credit card sales. Basically, this is an advance against expected credit card sales. Repayment is a percentage of daily sales paid for by credit card. Often, if there are enough regular sales, they do not require a credit check.
Neither invoice factoring or merchant cash advances are straight no credit check business loans, but they are funding options that do not always require a credit check. In fact, the merchant cash advance is pretty much a loan, but invoice factoring does not qualify as a loan because it does not have to be repaid. The main thing is, they replace the credit check with the security of invoices or credit card sales.
These are not technically no credit check business loans either. Grants are available through various sources, most often to minorities or those working to build in low income areas. They are available through local venues and other sources. They do not require a credit check because repayment is not necessary.
While SBA loans almost always require a credit check, they are still worth pursuing. That is because they do not require the same high credit score that other types of loans do. These loans have backing from the federal government. This means more paperwork, but often less stringent eligibility requirements. They will pull your credit. But it may not need to be as strong as it would for traditional loans not backed by the SBA.
After you find your no credit check business loans or other alternative funding option, focus on keeping the credit gas tank full in the future. If you have a strong business credit score, you could have the means to blast off further than you ever dreamed possible.
This is the first step to a strong credit score. It is best done in the beginning stages of building a business. Regardless of where you are in your venture, if you have not done this, now is the time. Start by incorporating your business or obtaining a DBA.
Which one you do is up to you. Each option for incorporation comes with its own set of challenges and benefits. For the purpose of establishing your business as a separate entity however, even a DBA will do the trick.
After this, list your business in the directories with its own phone number and address. It should be different than your personal phone number and address. Then, open a business bank account. This is the best way to separate your personal finances from your business finances.
Once you establish your business as a separate entity, it is time to start building a strong business credit score. This is how you fill that tank. Start with the vendor credit tier. Starter vendors will offer invoices with net 30 terms, meaning you have 30 days to pay them. This is a form of credit, and if they report to the credit agencies, you can easily build up your credit this way.
A couple of great ones to start with include Marathon and Uline. Between the two you can order anything from printer ink to coffee and snacks, and even shipping supplies.
Once you establish some credit through a vendor, try applying for a small business credit card. You don’t need anything fancy at first. Even just a small credit limit can be an effective credit building tool if you handle it properly.
Do not use the card for things that you cannot afford, but rather carry a small balance and make on-time payments each month. Any amount, no matter how small, can build your credit. The goal is to show that you can handle making payments.
After this, you can build up to other forms of credit until that credit score gas tank is perpetually topped off. This means you can blast off your business beyond the horizon whenever you feel it is time to expand and grow without fear of where the financing will come from.
While you are working toward establishing and building credit, and even after you have it where you want it, it is imperative to monitor your report. You can request a free credit report once per year from each of the major credit reporting agencies.
However, it is often more useful to join a credit monitoring service like the one offered by CreditSuite.com.
Once you know what is on your credit report, you know what you need to work on and errors that need correcting. If you do see mistakes, contact the credit agencies and let them know. It needs to be in writing, with the correct information given, and there needs to be supporting documentation. Do not send originals. Make copies.
Not having great business credit doesn’t have to ground your business rocket. You can still soar into space and build a solid business. No credit check business loans do exist, but they are few and far between. Once you find one and it serves its purpose, the real work begins. That is when it is time to improve your business credit so that you do not have to worry about going down the not credit check path again.
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