Do you need good credit to start a business?
Having good credit is not a requirement to start a business. However, some creativity may be required to overcome potential obstacles.
How do you get a loan to start a business with bad credit?
If you have bad credit and want to start a business you should look into business startup loans with no credit check. Below, we have compared some of the top choices for borrowers with bad credit.
Why do lenders need to check credit for a new business?
Anytime one party lends money to another party there is usually some level of risk involved. Running a credit check can allow the lender to evaluate the risk and propose appropriate terms.
For what reasons might a business borrow money?
Whether a business is just starting up or is well established, there are many reasons they may borrow money.
Some reasons a business might borrow money can include…
- Pay startup costs
- Cash flow
- Reduces personal risk
- Purchase inventory
- Make more money than it costs to borrow the money
Where can you get a business startup loan with bad credit?
FundBox is an invoice factoring company that services individuals and B2C entities. This fintech company can deliver fast funds up to $100,000.
$1,000 to $100,000
10.1% to 79.8%
3 to 6 months
No minimum personal credit score required
Time to Funding
A few minutes to several days
Click “Check Rates” to apply to FundBox
- No minimum credit scores
- Finances invoices for individuals and small businesses
- Transparent terms
- Minimum requirement 6 months in business and 6 months billed in your accounting software
- No collection services
- Transactions are full recourse
BlueVine can provide capital for small to medium sized B2B and B2G businesses. This fintech company is known for invoice factoring and servicing funding requests faster than most of its competitors.
Line Of Credit
$5,000 to $250,000
15% to 78%
6 or 12 months
Time to Funding
As fast as 24 hours
Click “Check Rates” to apply to Blue Vine
- Fast and easy application process
- Funding decisions typically made within 24 hours
- 80% of production is from repeat customers
- No hard credit checks
- No funding for B2C companies
- Prefers personal FICO scores above 600
- Factoring transactions are full recourse
Currency Capital is a small business lender that provides equipment financing. This lender does not require a minimum business credit score. For loans $150,000 or less Currency Capital highlights one of the simplest underwriting processes.
$5,000 – $2 million
6.00% – 24.00%%
Time to Fund:
As early as same day
One to five years
How To Qualify:
620+ Personal Credit Score
$120,000+ Annual Revenue
Great Option For:
Competitive Interest Rates
Click “Check Rates” to apply to Currency Capital
» MORE: Currency Capital Business Loan Review
- Borrow from $5,000 to $200,000
- Loan terms between 6-months to 7-years
- Competitive interest rates
- Works with businesses that have tax liens
- Can work with business owners who have had a personal bankruptcy
- No minimum business credit score
- Require business annual revenue of at least $120,000
- Does not work with businesses in certain industries
- Minimum personal credit score of 620 required
Lendio is an online fintech marketplace that connects businesses seeking financing with lenders that can provide it. Lendio asks you a series of questions that are used within their algorithm to help prioritize the best lenders for your situation.
- Multiple funding options for just about any business
- Easy application process
- Competitive pricing
- Network of 75+ lenders
- Marketing and solicitation can occur after application process
- Competitive bidding can cause uncertainty
What are alternative ways to raise money for a startup business?
Crowdfunding is an increasingly popular option for startups and mature businesses to raise money. Individuals or organizations can invest or donate to your crowdfunding projects. The process may sound simple but it will take a well thought out strategy and solid execution to work in most cases.
- Opportunity to not give up equity
- Fundees finance your product
- Creates momentum & opportunity
- Potential to raise a lot of money
- You must fund investors
- Risk for scam
- Requires hard work & preparation
- Arbitrary period in which you must win or lose can add unnecessary stress
Small Business Grants
State, federal, country, or local governments can grant money to an individual, business or corporation. Grants can be an attractive financial option because they don’t require repayment.
- Essentially free money
- No repayment
- Information about grants fairly easily accessible online
- Time consuming
- Application requires great detail about how funds will be used
- Tough competition
- Strict rules and eligibility
Friends & Family
Borrowing money from friends and family may help your business launch faster with fewer hurdles. However, there are significant risks involved that should be seriously considered.
- Flexible options
- Low to no interest rates
- Lender and borrower can benefit
- Tax issues
- Mix business and personal relationships
- Lack of clarity
Microloans & Nonprofits
Microloans can be offered to businesses that need less than $50,000 and are relatively easy to obtain.
- Helps business owners build credit
- Microlenders can provide advice to increase chances of success
- Funding can be available as soon as 14 days
- Inflated interest
- Missing a payment can affect credit
Business Credit Cards
Business credit cards can be easier to qualify for compared to a line of credit or bank loan. However, it’s important to use them wisely and read the fine print.
- Access to easy financing
- Potential to earn rewards
- Helps build credit
- Easy qualification
- Most business credit cards require personal guarantee
- More expensive financing option
- Security issues
In conclusion, small business loans with no credit check may be available for you to take advantage of. However, finding the right lender for your situation can be time consuming. PrimeRates.com can save you tons of time while helping you shop and compare offers.