Key takeaways

  • Most lenders use credit checks to determine whether you can repay a loan
  • It's possible to find no-credit-check business loans, though it depends on the lender and loan type
  • Expand your search to bad credit lenders for more options

The lending industry leans heavily on credit history when approving loans, making it difficult for some business owners to get business financing. Business owners may come to the table with a lean or no business credit history, especially if they’re just starting out. Others have poor personal credit, which can affect getting approved for business loans.

Aside from building credit, you can find specific types of business financing that put less emphasis on checking your business credit history.

Below, we look at your best bets for getting business financing with no credit check, plus options for business owners with fair or bad credit.

Why business loans require a credit check

Almost any time you get a conventional business loan, the lender will perform a credit check to see whether your history proves you’re creditworthy and will repay the loan. Lenders may start with your personal credit score and report, which shows the lender your payment history, mix of credit types and how much of your available credit you use.

If you’ve been in business for some time and built up your business credit, the lender may rely on a business credit check. Your business credit history will take into account payments to vendors, how much credit you use as well as your business’s size and risk of failure in your industry.

Bankrate insight
Most business credit bureaus provide a score between 0 and 100, except for the FICO Small Business Scoring Service (SBSS), which is scored between 0 and 300. The most common business rating system is the Dun & Bradstreet PAYDEX score which is based heavily on your business’s vendor payment history.

Why businesses may need financing with no credit check

Some of the main reasons why a business may need financing without a credit check:

  • The owner has fair or bad personal credit
  • It’s a startup with no credit history
  • It hasn’t built up its business credit score

No-credit-check business loans: Your best options

Finding a business loan or alternative financing with no credit check will depend on the lender you choose. But certain types of business financing weigh your business’s creditworthiness less than conventional business loans do. Those choices include:

Invoice financing

Invoice financing lets you rely on your unpaid accounts receivables (invoices) to get financing. Because it’s based on outstanding invoices, the financing company will look closely at your clients’ credit or payment history rather than your business’s.

But while it doesn’t rely heavily on your business credit, some lenders will perform a credit check against your business and your clients. If you’re looking to avoid this entirely, you’ll have to check with the lender.

Invoice factoring

Invoice factoring is a type of invoice financing that lets you sell your unpaid invoices to a factoring company. With invoice factoring, the factoring company collects payment directly from your clients, taking out fees upon collection.

Again, the factoring company relies on the financial outlook of your clients more than it considers your business’s credit. Credit checks will depend on the lender, but it’s either not considered or a low score won’t leave you out of the running for approval.

Merchant cash advances

A merchant cash advance (MCA) focuses on your business’s future sales revenue and less on your credit score for approval. MCA companies may pull your personal credit score to see whether your business can handle the debt. But they accept lower credit scores than many traditional commercial lenders, some as low as 500. The downside is that MCAs can be one of the most expensive forms of business financing.

Once approved, you repay the advance daily or weekly as a percentage of your sales or a fixed payment.

Bankrate insight
MCAs are known for their high approval rates, making them an accessible type of business financing. For businesses with employees, 90% of merchant cash advance applications get approved, according to the Federal Reserve’s 2023 Report on Employer Firms.


Microloans are business loans offered in low loan amounts, such as $50,000. Microlenders often cater to disadvantaged businesses that can’t find traditional financing elsewhere. They may lower the credit requirements to apply for a microloan or offer business loans with no credit check.

The most well-known microloan program is offered through government-backed SBA microloans. This program uses nonprofit lenders that specialize in serving disadvantaged businesses.

Kiva is another microlender that offers business loans of $15,000 or less through a crowdfunding campaign. If accepted, you’ll raise the money with private investors, repaying the money without interest. Accion Opportunity Fund is another microlender that offers its Progress Loan to minority and low-income business owners up to $250,000.

Business loans with low credit score requirements

You can find a variety of business loans that only require a low credit score. Again, requirements will be different from lender to lender, but these types of loans often loosen credit requirements:

Short-term loans

If you need a conventional loan with fixed payments, short-term lenders are the most likely to drop credit score requirements to make them available to more people. Some short-term lenders cater to bad credit borrowers, offering loans to those with personal credit scores around 500. But you may need to show strong revenue or business growth to offset your low credit score.

Short-term loans tend to offer repayment terms of six to 24 months, and they may charge high interest rates or factor rates to those with bad credit.

Business lines of credit

A business line of credit is a revolving business loan, which means that you get to draw funds from the available credit limit whenever you need it, and the limit replenishes as you pay off the loan. This conventional type of loan has a high approval rate and often lowers credit requirements compared to other conventional business loans.

For example, Fundible accepts credit scores as low as 580 for its business line of credit, though you’ll need at least $200,000 in annual revenue. Lendio is a business loan marketplace whose partners accept scores as low as 600.

Equipment loans

Equipment loans are secured by the equipment you’re financing as collateral, making it less risky for lenders to approve you despite a low credit score. Many lenders offer equipment financing for bad credit, accepting subpar personal FICO scores between 600 and 650 and $100,000 to $250,000 in revenue.

No-credit-check equipment financing may be difficult to find. But some lenders like Taycor Financial accept credit scores as low as 550 with no revenue requirement for loans under $250,000. And if you’re going for a specialized equipment loan like semi-truck financing, direct or online lenders may work with nearly any credit level.

Compare pros and cons of no-credit-check business loans

Green circle with a checkmark inside


  • Can get approved with bad or no credit
  • May prequalify for the loan without affecting credit
  • Can help you build business credit
  • Fast, short applications
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  • May charge higher interest rates or fees than conventional loans
  • May have short or aggressive repayment terms, such as daily or weekly payments
  • Limited loan amounts
  • Not typically offered by traditional banks

How to get business loans with bad credit

With a little planning and forethought, you can get approved for a business loan with no credit check or with bad credit. Some tips to put your best foot forward:

Create a budget

When you have fair or bad credit, lenders may look more closely at your business’s financial statements. You’ll want to either create or tidy up your business budget to give an accurate financial picture. Make sure that you’ve recorded all your business revenue and listed fixed and variable expenses.

This should help you calculate your profit and loss and prepare your balance sheet, showing your business’s assets and liabilities at a glance. You’ll also need several months of bank statements to show proof of your cash flow.

Check your credit report and score

Your credit history reflects how you’ll likely manage to repay your business loan, so lenders put an emphasis on your credit report. While you might be trying to get a loan without a credit check, look up your credit report to see how you can improve your score.

Ways to improve your credit:

  • Make payments on time. Consistent bill and debt payments not only improve your credit score over time but it show lenders that you’re responsible and can manage repayments.
  • Track your credit utilization. Credit utilization is how much of your available credit you use at any given point. Generally, you’re considered in good shape if you keep your credit utilization at 30 percent or less of your credit limit.
    <br />Let’s say your credit limit across all your accounts is $2,500. At a credit utilization of 30 percent, you’d want to use no more than $750 ($2,500 x 0.30 = $750).
  • Check for errors. Sometimes, credit bureaus have received inaccurate information about your payment or credit history, but you don’t have to leave it that way. Improving your credit score could be as easy as requesting a correction to your credit report.

Improve your application

Give yourself the best chance at getting a loan approval by presenting a clean application with all the relevant documents the lender needs. Not only do you need the financial statements mentioned above, but you can improve your application in a few ways:

  • Revamp your business plan. Having a buttoned-up business plan that shows strong revenue growth in the near term can make you stand out. It should overview your strategy and capture your vision for your business’s growth. It should also display how your products or services will stand out.
  • Offer additional collateral. You have a better chance of getting approved if you provide plenty of collateral. If you back the loan with business assets, the lender will need proof of its value in the form of an appraisal.
  • Increase down payment. If you have the capital available, let the lender know that you intend to offer a high down payment, such as 20 percent or more. Since the loan amount is lower, the lender is more likely to approve you or offer better terms.
  • Get a co-signer. A friend or family member with better credit than yours can help you qualify for a loan that the lender would otherwise deny. But co-signing poses a high risk to the co-signer since they’ll have to step in if you can’t make payments.

Compare multiple lenders

You won’t know what you can get until you start comparing lenders that accept no credit or bad credit. While you’re in the research phase, look for the following:

  • Soft or hard credit pulls. Some lenders perform a soft credit pull, letting you get prequalified for a loan without lowering your credit score. This is ideal if you need business financing but don’t want to hurt your credit score further.
  • Credit score requirements. Every lender develops its standards for credit scores. But online lenders and lending marketplaces may take personal credit scores in the 500 and 500 range.
  • Interest rates. As a bad credit borrower, you’re bound to see higher interest rates than borrowers with strong credit to back them. Also, check whether the lender charges an interest rate or factor rate. Factor rates get applied at the beginning to the entire loan amount, which means you’ll pay the entire fee whether or not you repay the loan early.
  • Fees. Consider any additional fees that type of loan or lender may charge you. For example, an invoice factoring company may charge a one-time fee as well as a percentage per week that your invoices remain unpaid.

Alternatives to business loans with no credit check

To avoid credit checks entirely, you don’t have to go down the road of getting a business loan in the first place. Try these options to help you get the funding you need:

Business grants

Getting a business grant is almost like getting free money to spend on business startup costs or expansion. But you will need to match the grant organizer’s precise qualifications, which may include working in a specific industry or being part of a minority community.

You can start by finding government-issued grants through the federal government’s website. Local governments are also likely to offer grants to develop the local business community, so you may want to research grants in your city or state. But private businesses and nonprofit organizations also offer programs geared to your industry or type of business.

You also have a host of choices if you’re part of a specific underserved community. For example, grants for veteran business owners may focus on startup phases or offer discounts for veterans getting into franchised businesses.

You can also find grants geared toward women business owners, some focusing on mentorship to help women-owned businesses succeed. These include opportunities for Black women entrepreneurs that offer financing to long-term mentorship to like-minded entrepreneur communities to support each other.


Crowdfunding is a way to raise business financing without having to qualify for a conventional loan. Funds are usually raised through a crowdfunding platform that works as a third party, connecting business owners with willing investors. As a third party, the crowdfunding platform doesn’t usually require a credit check.

Crowdfunding platforms underline the importance of social credit, which is your business’s reputation and responsibility to deliver on promises made to investors. For example, the platform Kiva requires you to start fundraising through your personal network before it opens up the project to other investors. Rather than using credit scores, Kiva deems the number of private investors as a measure of the business’s creditworthiness.

Bottom line

Your best strategy for getting business financing with no credit check is to look for specific loans or lenders that don’t focus on credit. But if you’re concerned that you won’t qualify because you or your business has bad credit, rest assured that some lenders specialize in bad credit business loans.

Many lenders even let you prequalify without using a hard credit check. That way, you know whether you’re likely to get approved ahead of time. Before diving into the application, check with each lender to see how they handle credit inquiries.

Frequently asked questions

  • Yes, most business loans require a credit check so that lenders can gauge your business’s ability to repay the loan. It’s important to note that many lenders start by looking at your personal FICO score, especially for startup businesses. Lenders may rely on your business credit score once you’ve built up a solid business credit history.
  • It’s possible to find business loans with credit score requirements as low as 500, although it’s not common. Online lenders are more likely to approve credit scores in this range.
  • You can start a business with no credit, but finding a business loan to spur growth can be difficult. You may need to start a business using personal funds and make it a priority to build your business credit history.