There are 28 million small businesses in the United States.
And 22 million of them are operated by the owner without any employees.
But with so many small businesses, how do they raise money to start up? And what do you do if you have a great idea, but no capital and bad credit?
In this article, we’ll discuss small business loans no credit check you could be eligible for.
Remember, this is only a primer. You’ll likely have even more options out there than you ever thought possible.
Take Out a Line of Credit with No Credit Check
If you’ve been in business for at least a year and have turned over $50,000 in profit, you’ll be eligible for a credit card without a credit check.
A line of credit without a credit check is a good way for people who don’t know exactly how much money they’ll need for their business. It’s also good for individuals who may want to have something stashed away for a rainy day. This way, you’ll be able to use your card in an emergency, but you might not want to use it every day for regular business purchases.
You can also use these types of business credit cards to rebuild your businesses’ credit so you can get better loans in the future. Simply only use the card on items you can afford and then pay them back onto the card immediately.
PayPal Working Capital
PayPal’s Working Capital is a fairly easy way to get a loan without a credit check.
If you accept money from your clients through PayPal, then PayPal will contact you when you’re eligible. But so you know, you’re eligible once you turn over $15,000 in revenue.
With this program, you can take out a loan to cover expenses you need right now.
Then, you’ll pay back the loan as a percentage of what you earn with further PayPal revenue. That means, it’ll take out a standard percentage, so it’s more if you make more money and less if don’t make as much.
Small Business Loans No Credit Check Online
According to Bonsai Finance, if you meet certain criteria, you’ll be able to take out online business loans without a credit check. In order to be eligible, you must be over the age of 18, as well as not have any outstanding personal loans. You’ll also need to show you have a way to pay by showing that your job gives you a regular income.
If you can satisfy these requirements, you can often get a loan without a credit check. Online loans disburse very quickly simply because they don’t perform a credit check, and instead have a lower threshold of whom they will lend money to.
They’ll also lend you money based on if they’ve determined you’re likely to repay the loan, not if past lenders have stated that you’re trustworthy.
This can be a great alternative to lines of credit because it’s a fixed amount. With lines of credit, you can continue to make purchases until your debt is out of control. You can’t purchase more than you originally agreed to take out with your loan, and you don’t get more money or credit if you pay part of the loan off.
With a fixed time to repay it, it can also mean the loan is off your plate in just a couple of years. A credit card can follow you for decades.
Invoice Financing
Invoice financing is a way to get paid before you get paid. It is often referred to as accounts receivable financing, or AR financing. It’s attractive because it gives you an advance on your payday, without giving you more money than you’re already owed.
With invoice financing, you can put together, say, $1,000 worth of outstanding invoices customers haven’t paid yet. When you apply for the loan, you’ll show these invoices. You’ll get paid based on what your customers owe you, which can allow you to move forward with projects or purchasing things for your business.
In most cases, you’ll need to have at least $1,000 of outstanding invoices before you can qualify for this type of loan. The loans can be for up to $2 million, depending on how big your business is.
With invoice financing, you’ll get the money disbursed almost immediately, which is a perk of the lenders not performing a credit check.
Like all loans, you’ll have a period in which you must pay the loans back in full before you begin to owe interest in it. In some cases, you will owe interest in it no matter what, but it will vary depending on the lender.
While some loans have short-term periods of two years of repayment, invoice financing loans are even quicker. You’ll need to be prepared to pay back this type of loan within weeks or months of taking it out.
So, before you bite the bullet on this one, make sure your customers don’t stiff you regularly.
Choosing the Right No Credit Check Loan
Choosing small business loans no credit check can be a highly individual process. You’ll want to be sure you’re not getting yourself into a situation you’ll be unable to get out of at a later date. You also want to be sure the loan will help enhance your business, and not hurt it in the long run.
Are you starting a business with a hefty amount of student debt? Click here to read about how this type of debt is hurting millennials’ net worth.
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