Best Business Loans Without a Credit Check
Companies of every scale sometimes need financing. Whether it's for day-to-day operations, buying new machinery, or planning for future expansion, a variety of loan products exist to support these goals. Just keep in mind, a vast majority of these options will involve looking into your credit history during the application process.
Should you want to consider funding without that credit check, alternatives are definitely out there. Just remember each choice comes with its own set of rules, conditions, and costs. It's wise to carefully think about what those regular repayments will mean for your company's finances before moving forward.
How Business Loans Work
Business financing is vital for companies, whether they're well-established or just starting out. There will be moments where your company could use additional cash for daily operations. Maybe growth is on the horizon, requiring a significant outlay for new property or machinery. For these situations, a business loan often becomes a key part of the strategy, offering a supportive financial cushion as your operations expand.
Getting ready for a loan means taking a close look at your financial standing. Financial institutions typically ask for your personal and business credit scores, any assets you can offer as security, and documents that prove your company's profitability. It's very common for them to examine your personal credit report as part of this. Some lenders have minimum score requirements, sometimes around 650 or 700, so knowing your own credit situation beforehand is a smart move.
When you submit an application, the lender will perform what's known as a hard credit inquiry to access your full credit history. Remember, this type of credit check can temporarily lower your score and might stay on your credit file for up to two years. It's a good idea to be certain about your chosen loan before you apply.
Should your application be successful, you'll get the full details on your loan's interest rate, repayment schedule, any required upfront payment, and fees for late payments. If a standard bank loan doesn't seem to match your needs, don't worry. Various other funding avenues exist for businesses to explore.
PayPal Working Capital
For a funding option that skips the credit check, your current payment processor could be a great starting point. Businesses using PayPal, for instance, often have access to their Working Capital program. This type of financing looks at your sales history through their platform instead of your traditional credit score.
The amount you can borrow here connects directly to your PayPal activity. Typically, a business can secure up to 35% of its yearly PayPal revenue. New borrowers might see limits around $150,000, while follow-up loans can go as high as $200,000. You'll repay with a fixed fee, not a standard interest rate. This fee is decided by the loan size, your account history, and the payback percentage you choose—usually between 10% and 30% of your daily sales. There's no set deadline for repayment; the loan closes once the borrowed amount plus that single fee is fully paid through your sales.
To be eligible, your business needs an active Premier or Business PayPal account for at least three months, with a minimum annual sales volume ranging from $15,000 to $20,000. A major advantage is that applying doesn't affect your credit, and no collateral or personal guarantee is needed. Approval can happen in just minutes.
It's a practical choice if you're confident your future sales can handle the automatic deductions. Remember, if sales drop to zero on a given day, no payment is taken, but a small minimum payment is required every 90 days to keep the loan active. This solution naturally works best for companies that already rely on PayPal for a good portion of their transactions.
American Express Working Capital
If you're looking for a cash flow solution that won't impact your credit, American Express provides an interesting option for its cardholders. Their Working Capital program offers short-term funding without a separate credit inquiry, designed specifically for existing business customers.
This program provides access to amounts ranging from $1,000 to $750,000. You'll encounter a simple fee structure, typically between 0.5% and 3% of the loan amount, based on your chosen repayment term and your history with AmEx. Repayment terms are quite short, usually lasting 30, 60, or 90 days.
Eligibility is straightforward: you need to be an active American Express Business Card member who uses the card regularly. A key requirement is that your own vendors must be able to accept American Express as payment.
The real convenience lies in how the funds are used. The money never hits your bank account. Instead, American Express pays your approved vendor directly within a few days. This immediate payment helps you maintain excellent relationships with your suppliers. You then have the agreed-upon term to collect payment from your own customers before repaying AmEx in full.
Getting approved is generally a quick process. Just remember, the entire loan amount plus the fee is due at the end of the term. This structure makes it a powerful tool for smoothing out payment timing mismatches, but it requires confidence that your incoming customer payments will arrive on schedule.
Square Working Capital
Many small businesses use Square for payments, and its financial arm, Square Capital, provides access to funding. The amounts available range from $300 up to $250,000, largely determined by your past sales processed through their system.
You'll repay the loan with a single, upfront fee. This fee typically falls between 10% and 16% of the total amount you borrow. The exact cost and your daily repayment rate become clear before you accept the funds. The full loan needs to be settled within an 18-month period.
To be considered, your business should already be a Square customer with a solid processing history, often meeting a minimum annual volume around $10,000. Once you establish consistent sales activity, Square may present a loan offer you can choose to accept.
Repayment happens automatically as a portion of your daily card sales. This model works well for businesses with predictable daily revenue, but it can strain cash flow if your income is irregular. For slower periods, you have the option to make a smaller minimum payment every 60 days. Even with these payments, remember the entire balance is still due by the 18-month mark.
FundThrough
For businesses that operate on invoices, turning those unpaid bills into immediate cash is a practical strategy. FundThrough provides two main paths for this: Velocity Invoice Factoring and Express Invoice Financing. Both methods use your outstanding invoices to secure funds without affecting your personal credit score.
The amount you can access depends on the total value of your eligible invoices and your company's overall cash flow. With Velocity Factoring, you sell your invoices directly. The fee for this service ranges from 2.5% to 7.5% of the invoice value, and it's influenced by the invoice's due date—fresher invoices usually cost less. Express Financing works more like a short-term loan backed by your invoices, typically carrying a cost of 6% or a weekly rate over a 12-week period. Repayment terms for both options generally align with your invoices' payment cycles, often between 30 and 90 days.
Eligibility differs between the two programs. Velocity Factoring is suited for businesses with a larger volume of invoices, from $15,000 up to $10 million. Express Financing caters to smaller needs, accepting invoices valued between $500 and $15,000. A key rule for both is that any invoice submitted must be less than 90 days old.
It's important to consider the operational differences. With factoring, a third party handles collection from your customers, which could change their payment experience. The Express loan option keeps you in charge of collections, but requires you to manage weekly repayments reliably. This makes consistent customer payments essential for maintaining smooth cash flow.