No-credit-check business loans
Worried that a hard credit check will affect your ability to get a business loan? Here’s everything you need to know about no-credit-check business loans. Get a quote today.
- Compare a wide range of lenders and rates
- Check your eligibility in minutes
- Find out how much you could borrow
It's fast, free and won't affect your credit score
- Do no-credit-check business loans exist?
- Why would I need a no-credit-check small business loan?
- Small business loans with no credit checks
- Is a no-credit-check business loan right for me?
- How to check my business loan eligibility
- Tips for applying with a poor credit history
- Why choose Capalona?
- No-credit-check business loan FAQs
If you’re a business owner looking for funding, but you’re worried about your credit score, or you’re a brand-new business without a credit history, you might be wondering what your loan options are. Searching for ‘no-credit-check loans for business’ might have brought you to this page, so what loan options are available to you?
Learn all about no-credit-check loans and your loan eligibility here.
Do no-credit-check business loans exist?
No, they don’t exist, because every FCA-authorised UK lender will perform a credit check of some sort before releasing funds to you. But there are plenty of loan options available that don’t rely on your credit score.
Soft vs hard credit checks
Understanding the difference between soft and hard credit checks can help you protect your financial reputation:
Soft credit check. This is a check only you can see on your credit report; no other lenders can see these. Lenders perform this to pre-approve you for credit cards and loans; it’s a top-level look at your credit report.
Hard credit check. This is a deep dive into your credit report and will remain on your file for up to two years. Too many of these in a short space of time can indicate financial difficulties to lenders.
Why would I need a no-credit-check small business loan?
There are many reasons you might want to bypass the traditional credit-score-focused business loans.
You want to protect your credit score
Each time a lender performs a hard credit check, it stays on your credit report for up to two years, so if you’re rebuilding your credit score, the more hard searches you have, the more it can affect your score. Seeking ‘no check’ options means you can compare loan deals without impacting your future borrowing power.
You need funds quickly
Alternative lenders can provide you with revenue-based funding that uses automated systems to check your bank statements. This means you’re not having to wait weeks for traditional lenders to underwrite your loan; instead, you have funds in your account within 24-48 hours.
You’re a startup
As a startup business, you have virtually no credit history. This makes it harder to get funding from traditional lenders. Alternative lenders look at more than your credit history; they take into account your business’s performance and business plan when making a lending decision.
You have a CCJ or missed payments
Missed payments or a CCJ shouldn’t mean the end of the road for your business lending. Looking for business loans with bad credit means you can find lenders who focus on whether you can repay the loan now, rather than on past financial mistakes.
Small business loans with no credit checks
Focus your business finance search on alternative lenders; these providers offer flexible, accessible lending products for all kinds of businesses.
1. Merchant Cash Advance (MCA)
With a merchant cash advance, the lender is more focused on your future sales. So as long as you have a steady stream of customer card payments, you can access up to £500,000. With an MCA, you repay a small percentage of your daily credit and debit card sales, which is great for businesses with seasonal cash flow.
2. Invoice finance
For invoice finance, lenders mostly care about the creditworthiness of your B2B customers more than you. That’s because the lender buys your unpaid customer invoices and transfers up to 95% of the invoice value instantly. When the customer pays the invoice, they transfer the remaining balance, less their fees, to you.
3. Asset finance
If you have high-value assets like machinery, equipment, or vehicles, you can use these as collateral to secure a loan. This is called asset finance, and because the lender can seize and sell the asset, they aren’t as focused on your credit score.
4. Revenue-based financing
Similar to a merchant cash advance, but revenue-based financing is linked to your revenue rather than just your card terminal sales. Lenders use open banking to determine how much you can afford to repay rather than zoning in on your credit score to make their decision.
Is a no-credit-check business loan right for me?
Always weigh up the pros and cons of any business loan before applying for one. Although revenue-based finance and other loan types provide business owners with accessible funding, they can come with a few drawbacks.
- You can have shorter repayment cycles. With an MCA, the lender makes daily or weekly withdrawals from your bank account, and with invoice finance, payment is due as soon as the customer pays the invoice.
- You can lose your asset. With asset finance, you’re securing the loan with a high-value asset, but if you fail to repay, the lender can seize it.
- You might have to sign a personal guarantee. To lessen your risk as a borrower, the lender might ask you to sign a personal guarantee. This means that should the business become unable to pay the loan instalments, you would become personally liable.
How to check my business loan eligibility
Getting a quote through Capalona is ‘credit-score friendly’. You can find out your eligibility without it affecting your credit score:
- Use our free business loan comparison tool. Enter a few basic business details like how much you need and how long you want it for.
- Soft search only. Our initial eligibility checker only uses a soft search. This lets you compare lenders that are likely to approve your application.
- Review loan offers. You can now compare lenders side-by-side. Compare total cost repayable, interest rates, and repayment terms in one place.
- Continue your application with the lender. If you find something suitable, you can continue with your full application with the lender. This is the stage at which the lender usually performs a hard check to finalise the loan application.
You will only trigger a hard credit search when you’re ready to proceed with your loan application.
Tips for applying with a poor credit history
There are some steps you can take to improve your chances of loan approval.
1. Be transparent about CCJs and bad debt
Most business owners have been through financial uncertainty, so having a CCJ or a period of bad debt isn’t uncommon. Be upfront and honest with the lender about your financial past.
2. Show cash flow
If you can demonstrate 3-6 months of clean bank statements, that will show the lender that you have consistent revenue. So get these ready before you apply.
3. Consider offering collateral
If you find you’re struggling to apply for an unsecured loan, consider a secured loan instead. This can significantly improve your chances of approval and lower your interest rate at the same time.
Why choose Capalona?
We’re not a lender, we’re brokers. And our comparison tool helps UK small businesses find and compare eligible loan products in one place, all without affecting their credit rating. Our lending panel includes banks and alternative specialist lenders, so we’re confident we can help you access the funding you need.
Don’t let a low credit score keep you from growing your business. Compare business loans.
No-credit-check business loan FAQs
In the UK, it’s not possible to get a loan from a regulated lender without a credit check. But you can get a loan where your credit check isn’t the deciding factor. You can apply for a merchant cash advance that focuses on your card sales, for example.
Yes. Many alternative lenders specialise in bad credit loans. They will check your affordability and ensure you can comfortably make loan repayments.
For small businesses and startups, the owner’s personal credit history is often used alongside the business’s. As your business becomes more established, though, it will have its own credit profile.
If you’re applying for unsecured finance, the lender might ask you to sign a personal guarantee.
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Adrian T
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Amazingly fast, efficient service, minimal paperwork. So much faster than my business bank of twelve years.
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