Small Business Brief

Financial Services

Can You Get No Credit Check Business Loans with Poor Personal Credit?

Are you one of the 39 percent of business owners who is a credit “ghost” — meaning you have a personal credit score that’s lower than 620 and one or fewer revolving trade accounts?

If this is the case for you, you might think that it’s impossible for you to qualify for a business loan. That’s not the case, though.

You can still qualify for no credit check business loans. Read on to find out how. You’ll also learn how you can raise your business credit score to make future loans easier to come by.

Personal Credit and Business Credit

In theory, your business credit score and your personal credit score are two separate things. In reality, though, they do influence each other in a few different ways, including the following:

Sole Proprietor

If you are a sole proprietor or if you run your business as a single-person LLC, your business credit score may be tied to your social security number. As a result, your personal spending habits will influence your business credit score.

This is why most business experts recommending applying for an EIN instead of using your social security number. This helps make it easier for you to separate personal and business finances.

Business Credit Product Qualification

When you’re applying for business credit products like loans and credit cards, lenders will often take a look at your personal credit score. This is especially true if you haven’t been in business very long.

Lenders have also found that a person’s personal credit score tends to influence the trustworthiness of their business.

Benefits of a No Credit Check Loan

As you can see, your personal credit can have an effect on your business credit and your ability to qualify for certain business loans and credit products.

At this point, you might be feeling as though it’s a waste of time for you to apply for these products if you have a low credit score. The good news, though, is that there are also no credit check loans that you can utilize to get the money you need.

There are lots of benefits that come with using these loans, including the following:

Avoid Hard Credit Checks

When you apply for business loans and credit products, you’re often subject to a hard credit check. Hard credit checks take a hit to your credit score and cause it to drop lower.

If you already have a low score, the last thing you need is something chipping away at it, especially if there’s a chance your application is going to end up getting rejected.

Get Financing Fast

Many no credit check loans get processed very quickly. This is especially true when you work with online lenders. With these loans, you can get the money you need for your business much sooner.

Raise Your Credit Score

You can also use no credit check loans in a strategic way to help boost your credit score.

If you make your payments on time, your credit score will slowly start to improve. As a result, it’ll be easier for you to qualify for larger loans with better terms later on.

No Credit Check Loan Options

There are a few different types of no credit check loans you might want to consider. The following are some of the most popular options for business owners:

Installment Loans

Installment loans require you to pay back the loan, plus interest, in set amounts on a regular basis (usually every month). These are some of the most common types of loans for business and personal use.

Short-Term Loans

Short-term loans, as their name suggests, give you a shorter-than-average amount of time to repay them.

These loans come with fixed fees and don’t require any collateral. The catch, though, is that you have to pay them back quickly.

Lines of Credit

This isn’t technically a loan. A line of credit can be a good option, though, if you need revolving credit to help you cover the cost of occasional business expenses.

Most of the time, you can open a line of credit with a soft credit check or no credit check at all.

Equipment Financing

You may also want to consider equipment financing. This option allows you to purchase new equipment for your business and use that equipment as collateral. 

If you take this approach, you may be able to avoid a credit check while still getting the equipment you need.

How to Raise Your Credit Scores

There are plenty of no credit check loan options you can read about and consider.

All of these are good options to help you get the money needed for your business. At the same time, though, you may also want to start making it a priority to raise both your personal credit score and your business credit score.

Here are some strategies you can use:

Personal Credit Score

To raise your personal credit score, make sure you’re paying all of your bills on time. Setting up automatic payments can make this easier and help you avoid missing due dates.

Keep your credit utilization low, too. Pay down your debt and try not to carry a high balance (or any balance at all) from month to month.

Business Credit Score

The same basic rules apply for raising your business credit score: make payments on time and keep credit utilization as low as you can.

You should also establish trade lines with your suppliers. This helps you build credit every time you pay your account balance.

If you haven’t secured an EIN for your business, do that as soon as you can, too. This will help you start building business credit separate from your personal credit.

Apply for No Credit Check Business Loans Today

Now that you know more about no credit check business loans and how to apply for them, are you ready to get your hands on some additional capital for your business?

Keep these tips in mind as you begin searching for the right loan option. They’ll help you find the best option that will help you expand or keep your business afloat.

Don’t forget to check out some of the other finance-related articles on our site as well. We’ve got lots of helpful information for business owners looking to improve the way they manage their finances.