Business Expansion

No Credit Check Business Loans: What Are My Options?

Last updated on April 3, 2020

Jacques Famy Jr

Can I Get a Business Loan With No Credit Check?

The truth is most business loan products require a personal credit check of the business owner to be able to get funding for the business, but there are options available in the business loan marketplace where a credit check is not needed that many business consultants are not aware of.

There are some Short-term business loans available that do not require a personal credit check, but they are few and far between. Additional invoice factoring does not look at the business owner’s credit, but that of the companies the business owner is invoicing and looks to get an advance on the funds.

Do Working Capital Business Loans With No Credit Check Exist?

Working Capital business loans do exist, but the product lines are limited to short-term business loans and invoice factoring. It is an urban myth that you can get a credit card either personal or business, without the business owner’s credit being checked.

When searching on google for “Business loans with no credit check,” there are a lot of websites providing bad advice and straight-up miss-information about what business loan products truly have no credit check. So be careful and ask questions upfront of the business loan specialist you are talking to.

What Are the Reasons for Business Owners Not Wanting a Personal Credit Check?

There can be only two reasons why a business owner would be searching for a business loan with no credit check, and that would be:

  1. They were denied financing for all other business loan products available in the marketplace
  2. They are just curious and exploring all available business funding options.

Why Lenders Check Credit

Before we dive into both short-term loans and invoice factoring, let’s discuss why business lenders check the personal credit of the business owner in the first place. A lot of business owners are surprised to know that when they apply for a business loan they want all of the information of the business owner so that they can pull credit of that business owner and their response is often, “I was asking for a business loan, not a personal loan, why do you need to pull my personal credit as the business owner? Why can’t you just look at my business credit?

The truth is the behavior of the business owner in personal life when it comes to credit, and paying bills is quite similar to the way they pay bills in their business life. Since the business owner is the ultimate decider in what gets paid, you can figure out that it makes sense that looking at that business owner’s personal credit history says a lot about the business owner and the way they handle credit and bills.

Hard vs. Soft Credit Inquiries

Before considering options for business loans with no credit check, you may want to know that there are significant differences in the type of credit inquiries. There is now both a “soft Credit pull” and a “hard credit pull.”

Hard Credit Pulls

Also known as a “hard inquiry”, is when a lender requests a report from up to 3 different credit reporting agencies, Experian, Equifax, and/or Trans Union.

By pulling three credit agencies, it is still considered only one credit pull. A hard inquiry can lower your score a couple of points, or it may have little to no impact, but it is unlikely to play a major role in any credit decision unless there are many hard pulls in a short period of time over a month. It is commonly misunderstood the impact of inquiries and only an issue when an individual is applying for to many things at the same time. Hard credit pulls allow lenders to take a greater risk because they receive more detailed information about the borrower than a soft credit pull, so they are more common with borrowers with bad credit.

Soft Credit Pulls

Also known as a “soft inquiry”, is used by lenders when they decide to use one out of the three credit bureau’s and provide less information than that of a hard pull, but enough information to make a credit decision about the borrower. They also don’t count as an inquiry the same as a hard pull, which in turn would have no impact on credit scores. Credit standards can be higher for lenders that use soft pulls and may lead to lower approvals for credit-impaired borrowers.

Best Business Loans with No Credit Check

Short Term Business Loans with No Credit Check

Short term business loans with no credit check provide a lump sum of money that is repaid over terms of 3 to 12 months. The cost is either a factor rate or principal & interest rate, and do cost more than normal business loans with a credit check. There is limited availability of Short-term business loans with no credit check, so it can be difficult to find. AdvancePoint Capital does have access to this product and can assist you in acquiring this type of financing.

Loan Amounts:  $10,000 up to $100,000

Rates: Factor rates between 1.18 to 1.48 of loan amount

Terms: 3 to 12 months

Processing Times: 1 Day

Invoice Factoring

Invoice financing, also known as “Invoice Factoring” or “Accounts Receivable Financing,” is a type of financing that allows business owners to get cash quickly from invoices that they would otherwise be waiting 30, 60, or 90 days to receive payment for.

This type of business advance of funds lets you, as the owner, finance purchase orders, or outstanding invoices. An invoice finance company will advance a set amount of the unpaid invoice to the business owner and then collect directly from the client or customer for the unpaid portion.

Because of this process, the credit evaluation is based on the business owner’s customer’s track record of paying the invoices, not the business owner, so a credit check of the business owner is not needed.

Fees:  1.5% to 2.75% of the advance of the invoice

Time Frame: Once approved invoices can be advanced daily

Processing Times: Can take a couple of days to approve and start getting advances from invoices

Frequently Asked Questions

Do Banks Offer No Credit Check Business Loans?

Banks and Credit Unions do not offer “no credit check business loans.” You will need to search for a marketplace business lender such as AdvancePoint Capital to find these types of products.

What Business Loans Have No Credit Checks?

Cutting through fact and fiction, the only types of business funding products that don’t require a review of the business owner’s personal credit are some Short-Term business loans and Invoice financing.

Are No Credit Check Business Loans Better Than Credit Check Business Loans?

The only time a business should choose a no credit business loan, other than invoice financing, is when they cannot get approved through a traditional business loan product. You will end up paying more money and less agreeable terms if you do not want your personal credit checked for the purposes of a business loan.

Advice, Tips, Warnings About No Credit Check Business Financing

We strongly recommend choosing business loan products that have the best terms over something that may seem to be easier like a no credit check business loan. Don’t let anyone convince you that something that is easy is necessarily better. As in any type of shopping or search, evaluate your eligibility, and investigate all options for financing your business before making final decisions.

AdvancePoint Capital is ready, able, and available to assist you in search for all products available in the business funding marketplace.

Start With This Online Form

Applying for a loan with AdvancePoint Capital is as simple as a 1, 2, 3, 4 process. Start with this online form, then fill out the short application page, wait a few hours for your approval, and then get your money!

AdvancePoint Capital offers an easy business loan experience. Our customers love the fast, streamlined process and high approval rates that come from working with us. All credit scores are considered.

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* All loans made by either WebBank, an FDIC-insured Utah industrial bank, or Bank of the Internet Federal Bank, an FDIC-insured federally chartered thrift located in California. In connection with the loans, the Banks' underwriting conditions and terms apply.