Skipping the Credit Check on a Business Loan
It almost sounds too good to be true: a business lender approving you for a loan without checking your credit? However many so-called "fintech" lenders look at the 5 C's: credit, capital, character, capacity, and conditions to determine your firm's ability to pay back a loan.
That last "c," conditions, can apply to several common business scenarios. Did you recently start your business? Are you planning to apply for a mortgage or other large loan soon, and don't want to jeopardize your credit? Or maybe your business is healthy, but your personal credit score is less than stellar. In all of these cases, a no-credit score-needed application can be the ticket to keeping your business running smoothly.
Getting Started with a No-Credit-Check Loan
Before applying, research a lender's requirements. Even if the lender doesn't require a credit check, their underwriters may want to review bank account statements, check to see that your business don't have any outstanding liens or judgments against it, and is an acceptable financial risk. Many business financing lenders will also ask you to provide a business plan, so they can learn about your business and how their funding may help.
Term loans are a lump sum of money provided by financing lenders, paid back at pre-determined intervals and amounts. Amounts lent, interest rates, and repayment terms vary by lender.
A business line of credit is revolving credit, similar to a business credit card. Borrow money as you need it up to your credit limit. Depending on the lender, interest rates maybe be fixed or variable.
Equipment loans help you in purchasing the tools of your trade, whether it's a fleet of vans, a few bulldozers, or a popcorn machine. With this loan type, the purchased equipment serves as collateral. So if you default, your business can be severely impacted.
Accounts receivable financing (a.k.a. invoice factoring) borrows against your unpaid invoices; you're selling the right to your future cash flow in return for cash in hand. The lender collects customers' payments and pays you the remaining invoice amounts — minus a pre-established fee. A big plus here for business owner with shaky credit is that most firms are more concerned about your customers' creditworthiness than your own, for obvious reasons.
Revenue advances provide a lump sum of cash, which you repay from a percentage of your debit- and credit-card proceeds. There's less risk from the lender, since it's drawing cash directly from your incoming deposits. A revenue advance may call for the lender reviewing your credit card processing statements and cash flow for the past six months, year, or more.
If you're looking for a quick infusion of capital so that you can bid on a large, potentially lucrative project, repair broken equipment, or add temporary staff, a no-credit-check business loan can be your ticket to growth and stability. When you pick a lender who listens to your particular business needs and can respond with flexible terms, you're on your way to building a beneficial business relationship.
Did you know?
77% of American small businesses surveyed reported rising costs of goods, services, and/or wages as a significant challenge.
Source: https://www.fedsmallbusiness.org/reports/survey/2024/2024-report-on-employer-firms
Since 2008, Fora Financial has distributed $4 billion to 55,000 businesses. Click here or call (877) 419-3568 for more information on how Fora Financial's working capital solutions can help your business thrive.
