If you have less-than-perfect personal or business credit, there are loans available that do not require credit checks. Most business loans require a personal guarantee, and will require rely not only on your business credit, but also your personal credit to secure approval and terms.

Generally speaking, borrowers need a score of at least 500 to qualify for a business loan from an alternative lender. If your score is 600 or above, more options are available. Traditional lenders will also consider the age of the business, and typically require at least three years’ worth of tax returns and financial statements as part of the loan application. Some lenders will consider scores as low as 650, but 700 is the preferred minimum. SBA lenders will accept credit scores from 620 to 680 as the minimum, but the requirements vary by loan program.

The Small Business Administration does not assign a specific credit score in their guidelines for SBA loans. However, since SBA loans are approved and processed by lenders, they have no problem requiring a credit check for applicants. For the SBA 7(a), this means a minimum credit score of approximately 640.

In general, different lenders will set their own credit minimums for business loans. For example, banks and credit unions require credit scores of at least 680; some will consider scores as low as 650, but 700 is the preferred minimum. SBA lenders require credit scores of at least 620 to 680, but the requirements vary by loan program.

The types of financing Commercial One Group offers without up front collateral requirements include: 

• Term Loan
• Invoice Financing (also known as “accounts receivable financing” or “factoring”)
• Inventory Financing
• Merchant Cash Advance
• Equipment Financing
• Purchase Order Financing
• Unsecured Business Line of Credit

Are you applying for a business loan? Commercial lenders may look at both your business and personal credit scores before they approve your application. If you have poor personal credit and are wondering if it will affect your approval or the terms of your business loan, the answer is yes, it can.

If you have a thorough business plan, you may be able to find a lender that is willing to take a chance on your business. Consider the following plan to establishing credit: 

1. Open a business bank accounts and develop a relationship with your bank
2. Request a loan by contacting Commercial One Group to talk about finance
3. Offer collateral
4. Find a co-signer
5. Get a business credit card

Yes! While getting approved for a business loan is easier with great credit, there are options to get a business loan with bad credit. If you have bad personal credit, you may have to look beyond traditional lenders and consider alternative lenders. Alternative lenders usually have small business loan options for business owners with less-than-stellar credit, as well as other financing programs that are not structured around credit ratings.

Business loans with no credit checks are a popular form of short-term financing for small business owners with bad or poor credit who need quick capital. These no credit check business loans do not involve lengthy and rigorous personal or business credit checks. Additionally, the application process for loans without credit checks is very simple and short, ensuring fast access to business funding. Thus, small business loans with no personal credit checks turn out to be the best alternative funding choice for borrowers with bad credit who are tired of loan turndowns by banks, credit unions, and other financial institutions. Although many merchant finance lenders claim to provide absolutely no credit check small business loans; this is not true, because lending a large amount of unsecured working capital without checking the borrower’s personal or business credit report is a huge risk to lenders. While all no credit check lenders do not pull credit reports on borrowers, they do perform soft credit inquiries before approving applications.

Yes, it is possible to get a business loan with bad credit. Depending on the type of financing you pursue, you may not need to leverage specific assets as collateral. Some lenders may require a personal guarantee, which means personal assets could be used to cover the loan if the business does not succeed. This also means that personal credit would also be impacted by the health of your startup loan. 

Read all loan offers carefully so you know exactly what your personal responsibilities are. Also note that any bad credit loan product will come with high interest rates since the lender views you or your business as a risk, and therefore less likely to repay the loan compared to a more established company with better credit.