A Business Startup Loan: No Credit Check Can Save Your New Business

Bad credit can feel like a noose around your neck. You know the hangman is coming and eventually you are going to feel the floor drop out from under you. You won’t be able to breathe, and your neck might just snap. There is hope however, a rescuer if you will, in the form of a business startup loan, no credit check.

They do exist, and because of this, you don’t have to worry about that hangman. You can escape the noose and get your business up and running. You just need know where to look and what to do when you find them.

For that, you need plan. You have to know where to find the business startup loans, no credit check required. You also need to know how to best prepare so you can get approval. Lastly, you need to know how to avoid that noose ever again.

We can help with both. Here, you will see not only how to find business startup loans no credit check, but also what to do with them once you have them. It isn’t rocket science, but it does take some knowledge. They don’t teach this stuff in school.

Everyone knows you need good credit to be successful, but no one ever tells you how to get good credit. I mean, you know that you have to pay your bills on time, but with business credit, no credit is the same as bad credit. Everyone starts out with no credit, so what’s the deal? How do you go from no credit to good credit if you have to have credit to get credit?

Confused yet? Don’t worry. We have all you need to know to get started.

Imaginary Noose

The truth is, that noose isn’t actually around your neck yet. You can get a business startup loan, credit check not even needed. They come most often from non-traditional lenders. These are those lenders that operate online only.  They don’t always have a good reputation, but there are some out there that are truly trying to offer a service.  They know that not everyone automatically has great credit, and they have found a way to provide them with the funds they need anyway. 

Not only that, but you can also get funding that isn’t even a loan at all without a credit check.

 This type of resource can help you get your business started regardless of what your credit looks like. The key is to handle with care. You don’t want that imaginary noose to change into a real one.  

Why No Credit Check?

Why would anyone need to take out a business startup loan, no credit check necessary? There are many reasons. Not all of them are bad either. For example, as a startup, it is possible that there is no business credit score at all yet. In the eyes of many lenders, this is the same as bad credit.

You may also have poor business credit. Maybe you are still considered a startup but have been in business for a few months with a couple of mistakes on the financial front. It happens.

Both of these issues are fixable, but it will take time. If you need money to get your business up and running, time is something you do not have. A business startup loan no credit check can be what you need to bridge the gap between awesome credit and an immediate need for funding.

Handle with Care

What exactly does that mean? Handle with care means that once you have the funds, you need to be careful. A business startup loan, no credit check required, is going to come with a cost. There has to be some way for the lender to reduce risk. Traditional lenders do this by checking credit scores. Non-traditional lenders that do not check credit have to find another way.

Generally, they increase interest and implement stricter repayment terms. While not fun, those things are simply the cost of a business startup loan, no credit check. For most, the cost is manageable if you go into it with your eyes wide open and a plan of action.

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Plan of Action

What is the plan of action? It is all in how you intend to use the funds. They should help you do whatever it is you need to do to improve and grow your business. Also, you can use the debt to build up your business credit.

If you do that, you will be able to find more affordable funding faster. This will allow you to get rid of the high interest business startup loan no credit check that you got. The lower interest rate may free up some cash by lowering your payments. As you make on time payments, your credit will only increase. This will help you be better able to access funding to continue to grow your business.

But let’s not get ahead of ourselves.

First Things First

You have this invisible noose around your neck and you need some money to cut it off. You are starting a business, your credit isn’t the best, and you need funds fast. Where can you find a business startup loan no credit check? You have a few options:

Business Startup Loan: No Credit Check

There is really only one true option for an actual business startup loan no credit check. That would be Kiva. Kiva allows you to put your business plan out there for the public to see if you meet a few minimum requirements. Basically, you have to make a $25 loan to another business on the platform. You also have to have at least 5 friends or family members willing to lend you a portion of the funds.

Here’s the best part though. They truly are a business startup loan. No credit check ever happens, and the interest rate is 0%. It is totally free. You have to pay the money back, but there is no interest included.

Is that It?

Not exactly. You have options for funding with no credit check other than Kiva, but they are not truly loans. These include investment options such as crowdfunding and angel investors, as well as grants.

After that, there are options for loans that still do a credit check. The catch is, the credit score necessary is much less than that of traditional lenders.

Crowdfunding

As for crowdfunding, there are many, many platforms available now. Some are better than others, and it will take a little research on your part to figure out which one best fits your needs. 

The most popular are Kickstarter and Indiegogo. They are pretty similar save a couple of major differences.

· Receipt of Funds: With Kickstarter, you set your fundraising goal and do not receive your money until you reach that goal. If you never reach the goal, you never see the money. With Indiegogo, you can choose to receive your funds as they come in or after you reach your goal

· Fee Payment: With both platforms there is a 5% fee after a successful campaign, but Indiegogo offers more flexible payment options for this.

Another thing about crowdfunding is that you generally provide your investors with some sort of rewards. It may be a free product or something else. Sometimes there are different rewards offered for different investment levels.  

In crowdfunding, investors can pitch in as much or as little as they want. To this end, many who are trying to get a business up and going create “levels” of investment. For example, those who invest between $5 and $100 may get one incentive. Another incentive for those that give between $100 and $500 may be a little bigger. The best incentive would be for those that invest over $500.

How many levels and what the range is would be up to the individual business owner.

The levels vary based on what the business owner has to offer, but you will to come up with something. You also have to follow through. There have been lawsuits due to business owners not following through or not following through fast enough.

Angel Investors

These are high net worth individuals that are willing to invest in your business. Often, they come in the form of friends or family that believe in the long-term success of your business.

Venture Capital

Similar to angel investors, these are investors that believe in the long-term success of your business. The difference is that these funds come from investment banks, other financial institutions, or individuals outside of friends and family. Venture capital can come in the form of expertise rather than funds also.

Small Business Administration

There are a couple of possibilities with the SBA. Though they do not offer a business startup loan, no credit check or otherwise, they guarantee loans offered through lenders that they work with. Because of this guarantee, lenders are sometimes able to lend funds to borrowers that would not otherwise be eligible due to a low credit score. 

They also offer grants to small businesses owned by minorities, veterans, and women. Owners starting businesses in low income areas are sometimes eligible for SBA grants also.

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Stay Away from the Gallows

Once you get your money and that noose is gone, it is time to start focusing on staying away from the gallows. The key is to use what you have to build a strong business credit score. Just like any strong structure, you have to start with the foundation.

Lay the Foundation

This is what we usually refer to as establishing business credit. It’s not rocket science, but it does require laying some pretty specific stepping stones. All of these lead toward establishing your business as an entity separate from you as an individual. Then, it can have its own credit score.

First, you should incorporate your business. Now, incorporation can happen in a few different ways, each of which cost time and money. If you do not feel you need the protection that incorporation offers, you can gain the separation needed by operating as a DBA. Just remember you will need to go through the IRS to obtain a legal DBA as well.

Next, get your business its own phone and fax number. The phone number should be an 800 number or some other toll-free exchange, and list it in the directories under that number.

Last, open a bank account under the business name. Run all business transactions through this account to keep the business financials separate from your own. Not only does this reinforce the separation issue, but it will help you establish a relationship with a lender. That will be useful when you need a business loan and do not have to worry about a credit check.

Build Credit

Once you have the foundation laid, you can work on building your business credit. If you found a business startup loan, no credit check or otherwise, that will be a great start. Once you start making consistent, on-time payments they will report them to the credit agencies. That is how your credit score improves.  

It is also a good idea to work with starter vendors. These are vendors that offer net 30 terms and will report payments to credit agencies so that your credit will continue to build. A couple we like are Quill and Uline.

Quill offers a variety of supplies, snacks, and beverages for the office. Uline sells packing supplies, among other things. Both have pretty minimum requirement for net 30 terms, and neither of them do a credit check. This makes them a great starting point.

Never Go Back

Once your credit is on solid footing, don’t slide back down the rabbit hole of bad credit. Whether your issue was just not having any credit yet, or you had some bad financial decisions haunting you, never go back. Remember you have options to access funds, including business startup loans, no credit check if needed.  

Keep your eyes open for grants and investors who may want to work with you along the way. You never know when they may come in handy, and free money is always better than debt. However, when you need debt, a higher credit score will make it much more cost effective than a lower credit score will.

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