Do you have a million-dollar business idea and in serious need of a startup loan? You are not alone. Many small businesses lack business funding to finance their expenditure and other operations. This problem is further compounded by the business owner’s bad credits scores, leading them to be branded as too risky to access a startup loan.
Find out more about startup loans with no credit checks in the following article.
In these harsh economic times, small businesses without a good credit rating stand no chance of getting quick loans from loaning agencies. This is due to the fact that almost every traditional financing source avails loans to firms with good credit records only. And if a loan program is available, the contract features high interest rates and inconvenient repayment terms which further presents more bottlenecks to these small businesses.
If the loan was the last option your small business depended on to be on its feet, it’ll be hard to change the probability of your small business shutting down.
This, however, does not have to be the case, small business startup loan with no credit check for sure do exist. The lenders are credible, legit and specialize in the high-risk sector.
Below is everything you need to know about the small business loan startup loan with no credit check;
Personal credit score defines a person’s creditworthiness. In other words, analyses your habit of paying back bills or debts. A small business applying for startup loans to firms that don’t check their credit scores can only access between $100,000- 250,000 if the terms and conditions of the loan are met.
They are short-term financing programs that are eligible for businesses that don’t have credit scores or want to keep their credit scores secret.
These type of financing programs are available online on digital application platforms with the lenders using proprietary algorithms to assess an applicant’s qualifications. They are made easy to apply and are highly recommended for businesses with poor background credit information and are in need of quick money.
Due to the risk involved in giving out loans to new businesses with a poor credit report, the financing firm charges the business a separate amount of fee(interest) from the principle that’s set to be paid weekly or monthly. The amount is set depending on the contract terms and the borrowers’ qualifications.
The application doesn’t require heavy work paper load and the loan is funded within 48-72 hours after application. According to our research, the analysis of many lending agencies that don’t check credit scores averaged the following statistical results:
Loans averaged from a minimum amount of $2000 to a maximum of $300,000. The contract term depends on the amount of money borrowed but often goes for 3 – 12 months. The interest rate as we stated earlier depends on the terms, however, it ranges between 4% -10% on every installment.
Apart from those terms, some lenders also cover the risk by charging three types of fees – origination fees, fees for not checking your credit history and monthly maintenance fees. These fees are not compulsory, as there are lenders who don’t charge those fees and if the small business credit score was good then suddenly went bad.
For a small business to qualify for startup loans without credit checks there are a number of requirements and conditions they must meet.
Having a bad credit score should never limit your prospects in terms of accessing a business financing to propel your idea into actualization. As you can see, there are multiple financing options for small business startup loan with no credit check. All you need to do is check the requirements and throw in your application. Goes without saying, different lenders may place limitations depending on the type of business you are operating.
Joshua is a financial lawyer who plans on writing a book about his experience on debt collection laws and lending terms and conditions. He is currently one of the senior partners at his law firm but wants to take more time off for his writing.