Business Financing

7 Best No Credit Check Business Funding Options: Success Tips for SMBs

By FundThrough

Key Takeaways

Many alternative lenders offer business funding without conducting a credit check, focusing instead on business revenues and cash flow, providing a viable option for businesses with poor credit.
When evaluating loan options, it’s important to keep in mind that funding methods that don’t require a credit check still come with other ways to secure the loan balance.
Businesses can leverage their outstanding invoices to access funds, as lenders typically assess the invoices’ value rather than the business owner’s credit score.
Choosing options strategically that will help you build your business credit score can put you on the path to unlocking loans in the future with lower interest and more flexible repayment terms.

Securing business funding can be challenging if your credit score is low or you need startup funding you haven’t had time to build your credit–thankfully, whether you’re a business owner, CEO, or CFO, you’ve got funding options. This article explores the best funding solutions for businesses in this situation and compares top online lenders to help you figure out your next steps. (You can also explore working capital loans with no credit check if that’s your specific need.)

Can you get a business loan with no credit check?

Yes, you can get a business loan with no credit check. Lenders offering these loans typically require collateral, higher interest rates, or proof of strong business revenue. Options include merchant cash advances, invoice financing, and alternative lenders specializing in no-credit-check business loans–all of which we’ll cover.

How Do No Credit Check Business Loans Work?

Business loans that don’t require business credit checks feature other ways to ensure the balance gets repaid or that the lender at least makes money from the loan if you default. (Unless they don’t require repaying the balance at all.) These are often specific to the type of funding. For example:

Invoice financing: The balance is secured by the outstanding invoice and approval depends on your customer’s creditworthiness.
Crowdsourcing: If it’s donation based, there’s no expectation of repayment. If it’s equity based, contributors hope to earn a return on their investment.
Grants: These don’t have to be repaid, but they come with other strings attached. You often have to commit to using the funds for a specific purpose, and they’re typically considered taxable income.
Payment processor loans: A loan from Stripe, Square or Paypal requires that you use the platform and deducts payments from your account on a fixed schedule.
Peer-to-peer Lending (or Microloans): Individual investors fund loans, hoping to earn a return. Or, a crowdfunding style of microloans helps you collect donations to fund your budding business.
Merchant cash advances: the loan is repaid through a portion of your credit card sales every week.
Asset based lending: the value of the asset you’re putting up as collateral secures the loan, rather than your credit score.

The takeaway? Even though these options don’t require credit checks, there’s always a catch. The main thing is to keep them in mind as you’re evaluating your options.

7 Types of No Credit Check Business Loans

1. Invoice Financing

When is invoice financing a good idea?	Invoice financing (also known as invoice factoring) is a great option for businesses that have outstanding invoices for creditworthy customers and need immediate cash flow. It is particularly useful for companies that operate on net-30, net-60, or net-90 payment terms and struggle with delayed customer payments. If your business has a reputable client base but experiences cash flow shortages due to unpaid invoices, invoice financing can help bridge the gap.
What is invoice financing and how does it work?	Invoice financing allows businesses to receive an advance on unpaid customer invoices. A lender provides a percentage of the invoice amount (typically 75%-95%) upfront, and once the customer pays the invoice, the lender releases the remaining balance, minus fees.
Pros of invoice financing	Quick, easy access to cash Approval is based on your client’s creditworthiness, not yours. No debt—your selling an asset, which is your unpaid invoice.
Cons of invoice financing	Requires strong, creditworthy customers for approval. Customer contact to redirect payments required. Can be difficult to reconcile in accounting.

2. Crowdsourcing

When is crowdsourcing a good idea?	Crowdsourcing is a great option for businesses that have a strong online presence, a loyal customer base, or a compelling story to share. It works well for startups, creative projects, and innovative products that need funding for development.
What is crowdsourcing and how does it work?	Crowdsourcing (or crowdfunding) involves raising funds from a large number of people, typically through an online platform. Supporters contribute money in exchange for rewards, equity, or early access to products, depending on the type of campaign.
Pros of crowdsourcing	No repayment required (for reward-based crowdfunding). Builds customer engagement by involving backers early. Validates market demand before full-scale production.
Cons of crowdsourcing	Uncertain funding success—campaigns may not reach their goals. Time and effort required for marketing and campaign management. Potentially high platform fees.

3. Grants

When are grants a good idea?	Grants are ideal for businesses that meet specific eligibility criteria set by government agencies, corporations, or nonprofit organizations. They are particularly beneficial for companies in industries such as technology, healthcare, education, and sustainability. If your business is engaged in research, innovation, or community-focused projects, applying for a grant can provide valuable, non-repayable funding.
What are grants and how do they work?	A grant is a financial award given by an institution to support businesses that align with their objectives. Unlike loans, grants do not require repayment, but they often come with strict application requirements and reporting obligations.
Pros of grants	No repayment required—free funding. Supports specific industries like tech, healthcare, and sustainability. Enhances credibility by having government or institutional backing.
Cons of grants	Highly competitive—many applicants for limited funds. Strict eligibility criteria—not all businesses qualify. Often designated for specific purposes

4. Payment processor loans

When are payment processor loans a good idea?	These loans are ideal for businesses that already process payments through platforms like Paypal, Stripe, or Square, as approval is based on sales history rather than credit scores. Since repayment is automatically deducted from daily sales, they are especially useful for businesses with fluctuating revenue.
What are payment processor loans and how do they work?	PayPal, Stripe, and Square offer business loans and cash advances based on a company’s payment processing history. Instead of traditional interest rates, these loans typically have a fixed fee and are repaid automatically as a percentage of daily sales. Unlike bank loans, these financing options do not require collateral and have a simple application process with quick funding—sometimes within 24 hours.
Pros of payment processor loans	Fast approval and funding – Businesses can receive funds in as little as one day. Flexible repayment – You can often choose the percentage of your sales that are deducted for repayments. No personal credit check – Approval is based on payment processing history rather than personal credit scores.
Cons of payment processor loans	Higher costs – Fixed fees can be expensive compared to traditional bank loans. Frequent deductions – Repayments come directly from sales, impacting daily or weekly cash flow. Limited loan amounts – Funding is capped based on processing volume, which may not meet larger financing needs.

5. Peer-to-peer Lending

When is peer-to-peer lending a good idea?	Businesses that process a high volume of payments through PayPal, Square, or Stripe may benefit from a payment processor loan. This type of funding is ideal for businesses that need quick working capital but may not qualify for traditional loans.
What is peer-to-peer lending and how does it work?	Payment processor loans are small business loans offered through platforms like PayPal, Square, and Stripe. Eligibility is determined by sales volume and transaction history rather than credit scores. Once approved, funds are deposited quickly, and repayments are automatically deducted as a percentage of daily sales.
Pros of peer-to-peer lending	Fast approval and funding, often within 24-48 hours. No fixed monthly payments—repayments adjust based on revenue. No credit check required—approval is based on sales history.
Cons of peer-to-peer lending	Only available to existing users of the payment processor. Repayments reduce daily cash flow, which may be challenging during slow sales periods. Loan amounts are limited based on transaction history.

6. Merchant cash advances

When are merchant cash advances a good idea?	A merchant cash advance is suitable for businesses that need immediate cash and have strong credit card sales. While B2C businesses typically use MCAs, B2B businesses can use them if they receive regular credit card payments. If you can’t qualify for a traditional loan but need fast funding, an MCA can provide a quick solution, although it comes at a high cost.
What are merchant cash advances and how do they work?	MCAs provide businesses with a lump sum in exchange for a percentage of future credit card sales. Repayments occur daily or weekly, automatically deducted from the business’s credit card transactions, until the agreed-upon amount (plus fees) is repaid.
Pros of merchant cash advances	Fast approval and funding, often within 24 hours. No fixed payments—repayments adjust with revenue. Easier qualification—businesses with low or no credit can potentially qualify.
Cons of merchant cash advances	High cost—factor rates (e.g., 1.2x-1.5x the loan amount) make it expensive. Frequent payments reduce cash flow. Risk of default–many businesses can’t keep up with the repayments.

7. Asset based lending

When is asset based lending a good idea?	Asset-based lending is best for businesses with valuable assets, such as inventory, accounts receivable, or equipment, that they can use as collateral. This type of financing is ideal for companies that need flexible capital but may not qualify for unsecured loans. It works well for growing businesses since they can operate like a revolving line of credit based on their asset value.
What is asset based lending and how does it work?	Asset-based lending allows businesses to borrow against their assets. The lender assesses the value of the assets and provides funding accordingly. If the borrower defaults, the lender can seize the collateral to recover losses.
Pros of asset based lending	Higher borrowing limits based on asset value. Flexible use of funds for working capital or expansion. Easier approval for businesses with strong assets.
Cons of asset based lending	Risk of losing assets if unable to repay. Ongoing monitoring—lenders may require audits and asset valuations. Potential fees and restrictions, such as maintenance and assessments.

The Best No Credit Check Business Lenders

Best for Invoice Financing: FundThrough

FundThrough is a tech-powered invoice financing platform that enables you to get your outstanding invoices paid in days. After your initial setup and first funding, you can request funding in one click and see cash in your bank account in a day. It’s an ideal solution for businesses that struggle with cash flow. FundThrough has been recognized by outlets like Forbes Advisor and Investopedia as Best Overall Factoring Company.

FundThrough’s Pros	Fast, flexible access to cash flow anytime Unlimited funding, for as much as you have in eligible invoices Easy application process Same day funding available (after first funding) Debt free because you’re selling an asset–your unpaid invoice Non-dilutive capital Choose which invoices you want to fund (a.k.a., spot factoring) 100% advance rates No hidden fees; transparent pricing Dedicated support Simple online application Optional QuickBooks and OpenInvoice integration No long-term commitments after your customer pays the invoice
FundThrough’s Cons	Must use FundThrough platform Can’t work with construction or real estate industries
FundThrough’s Pricing	2.75% per 30 day terms
FundThrough’s repayment terms	Your customers pay their invoices to FundThrough according to net terms
How to get started with FundThrough	See if you’re pre-qualified

Best for Crowdsourcing: Kiva

Kiva a nonprofit organization that offers crowdfunded microloans to small businesses, providing entrepreneurs with access to capital through a community-driven platform from investors and lending partners around the world.

Kiva’s Pros	Accessible to Startups: Ideal for new businesses lacking extensive financial history. Community Support: Engages a network of lenders who can become advocates for your business. Flexible Use: Funds can be used for various business purposes. Credit Building: Timely repayments can help establish or improve creditworthiness.
Kiva’s Cons	Funding Not Guaranteed: Success depends on attracting enough backers. Time-Intensive Campaigns: Requires effort to promote and manage the fundraising campaign. Limited Loan Amounts: Loans are capped at $15,000. Potential Delays: Time taken to reach funding goals can delay access to funds.
Kiva’s Rates	0% for direct loans in the U.S.; other lending partners charge individual rates.
Kiva’s repayment terms	6 months to 3 years
How to get started with Kiva	Apply Here

Best for Grants: Grants.gov

Grants.gov is the primary resource for finding and applying for federal grants, offering various funding opportunities for small businesses in the U.S. For businesses in Canada, start your search for government grants here.

Grants.gov’s Pros	Non-Repayable Funds: Grants do not require repayment, easing financial strain. Diverse Opportunities: Access to numerous grants across different sectors. Government Backing: Credibility associated with federal funding. Resource Availability: Comprehensive database with detailed information on eligibility and application procedures.
Grants.gov’s Cons	Highly Competitive: Securing grants can be challenging due to high demand. Complex Application Process: Requires detailed proposals and strict adherence to guidelines. Specific Eligibility Criteria: Not all businesses qualify for every grant. Lengthy Approval Times: The review process can be time-consuming. Reporting Requirements: Grant recipients may need to provide detailed reports on fund usage.
Grants.gov’s Rates	Not applicable
Grants.gov’s repayment terms	Not applicable
How to get started with Grants.gov	Learn about how to apply

Best for Payment Processor Loans: PayPal Working Capital

PayPal Working Capital offers loans to businesses that process payments through PayPal, with repayments tied to a percentage of daily sales.

Paypal Working Capital’s Pros	Fast Access to Funds: Quick application with funds available in minutes upon loan approval. No Business Credit Check: Approval is based on PayPal sales history. Fixed Fee: Transparent, one-time fee with no periodic interest. No Early Repayment Penalty: Pay off the loan early without additional costs.
Paypal Working Capital’s Cons	Limited to PayPal Users: Only available to businesses with a PayPal Premier or Business account for 90+ days. Doesn’t build business credit: Loan repayments won’t help you build a good business credit score. Daily Sales Impact: Repayments reduce daily cash flow. Not Ideal for Low Sales Periods: Slow sales can prolong repayment duration
Paypal Working Capital’s Rates	Undisclosed fixed fee added to loan amount
Paypal Working Capital’s repayment terms	Automatically deducted as a percentage of daily PayPal sales until the loan and fee are repaid.
How to get started with Paypal Working Capital	Learn more and apply

Best for Peer-to-peer Lending: Prosper

Prosper is a peer-to-peer lending platform that primarily offers personal loans, which can be utilized for various purposes, including funding small business needs in some cases.

Prosper’s Pros	No Prepayment Penalties: Borrowers can repay loans early without incurring additional fees, potentially saving on interest costs. Fixed Interest Rates: Predictable monthly payments due to fixed rates help in budgeting and financial planning. Quick Funding: Approved loans can be funded within a few business days, facilitating timely access to capital. Transparent Terms: Clear disclosure of loan terms and fees aids in informed decision-making.
Prosper’s Cons	Personal Liability: As the loans are personal, the borrower is personally responsible for repayment, which can impact your personal credit score. Lower Loan Limits: The maximum loan amount is $50,000, which may be insufficient for larger business needs. Origination Fees: Loans come with origination fees ranging from 1% to 9.99%, deducted from loan amount. Credit Score Requirements: A minimum personal credit score of 600 is recommended, potentially excluding those with less favorable credit histories. Some options only require a soft credit pull.
Prosper’s Rates	Annual percentage rate (APR) from 8.99% to 35.99%
Prosper’s repayment terms	2 to 5 years
How to get started with Prosper	Learn more and apply

Best for Merchant Cash Advances: Rapid Finance

Rapid Finance offers merchant cash advances (MCAs) to small businesses, providing quick access to capital based on future credit card sales.

Rapid Finance’s Pros	Fast Funding: Approval and funding can occur within a few days. Lenient Credit Requirements: Businesses often still qualify regardless of credit score. No Collateral Required: MCAs are unsecured, not requiring specific assets as collateral. High Approval Rates: More accessible to businesses that may not qualify for traditional loans.
Rapid Finance’s Cons	High Costs Compared to Traditional Loans: Factor rates typically range from 1.11 to 1.25. Daily or Weekly Repayments: Frequent deductions can strain cash flow, especially during low-sales periods. Short Repayment Terms: Typically requires repayment within 3 to 18 months. Potential for Debt Cycle: Businesses may become reliant on MCAs, leading to repeated borrowing. Lack of Regulation: MCAs are less regulated than traditional loans, potentially leading to less favorable terms.
Rapid Finance’s Pricing	Factor rates from 1.11 to 1.25.
Rapid Finance’s repayment terms	3 to 18 months
How to get started with Rapid Finance	Learn more and apply

Best for Asset-Based Lending: Accord Financial

Accord Financial provides asset-based lending solutions, allowing businesses to secure financing by leveraging assets such as accounts receivable, inventory, and equipment.

Accord Financial’s Pros	Higher Borrowing Limits: Loan amounts are based on the value of assets, potentially allowing for larger loans. Flexible Use of Funds: Funds can be used for various business needs, including working capital and expansion. Easier Qualification: Businesses with valuable assets may qualify even with less-than-perfect credit. Scalable Financing: As business assets grow, borrowing capacity can increase.
Accord Financial’s Cons	Asset Risk: Failure to repay can result in the loss of pledged assets. Limited funding: Your funding is limited to the appraised value of the asset. Complex Agreements: Understanding terms and conditions may require professional assistance.
Accord Financial’s Rates	Varies based on borrower and asset
Accord Financial’s repayment terms	Operates like revolving loan; payments on an agreed-upon schedule and draw against the asset value as needed.
How to get started with Accord Financial	Learn more and apply

Tips to Successfully Apply for a Business Loan Without a Credit Check

While you should certainly tailor your approach to the specific type of financing that’s the best fit for your business, it’s helpful to keep the following in mind for all your small business financing applications:

Organize your financial records – Have up-to-date profit and loss statements, tax returns, bank statements, and revenue reports ready. These are still important for alternative lenders, not just traditional lenders.
Understand your current and future funding needs – Are you funding short-term cash flow gaps (in which case, invoice financing might be a fit) or long-term growth (which lends itself well to asset-based lending)? Match financing to your goals.
Showcase stability and path to profitability – If possible, highlight consistent revenue growth, strong customer demand, or expansion plans.
Check for hidden fees – Origination fees, prepayment penalties, or late payment fees can add up. Read the fine print.
Understand the terms – You need to know what will happen if you default on the loan and how you will mitigate that risk. Get familiar with other common requirements, like time in business, a personal guarantee, or annual revenue.

Tips for Building Your Business Credit Score

Getting the funding you need isn’t the only reason to pursue a business loan without a credit check. For methods that will enable you to build up a strong business credit score, you can start opening the door to more business lending options with more competitive interest rates and flexible terms, like a SBA loan–or financing from traditional lenders, like lines of credit. You can also build your credit to get traditional business loans in the following ways:

Work with vendors that report to credit bureaus – Some suppliers extend trade credit (Net-30 terms) and report payment history.
Make payments on time or early – Late payments negatively impact your score. Early payments can help boost it faster.
Register with Dun & Bradstreet (D&B), a major business credit bureau. Many lenders and suppliers use this to check creditworthiness.
Apply for a business credit card – Choose a card that reports to business credit bureaus (not all do).
Keep your business credit card utilization low and pay off the balance monthly– Aim to use 30% or less of your available credit to maintain a strong score and avoid carrying a balance.
Check your business credit score regularly on your credit report – Get reports from Dun & Bradstreet, Experian Business, and Equifax Business, and dispute any errors.

FAQs about No Credit Check Business Loans

Can I get an SBA loan with a 500 credit score?

Getting an SBA loan with a 500 credit score is difficult but not impossible. Most SBA loans require a credit score of at least 620-640. However, SBA microloans and certain lenders may approve lower scores if backed by strong business financials or collateral. Alternative lenders may offer options but with higher interest rates.

Can I apply for a loan with my EIN number?

Yes, you can apply for a loan using your EIN (Employer Identification Number). Business loans, including lines of credit, SBA loans, and equipment financing, may be available based on your EIN and business credit profile. However, many lenders still require a personal guarantee and may check your personal credit score.

How to get an LLC loan with bad credit?

Get an LLC loan with bad credit by exploring alternative lenders, secured loans, or business cash advances. Improve approval chances by offering collateral, providing strong business financials, or applying with a co-signer. SBA microloans and invoice factoring may also help businesses with poor credit secure funding.

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