Unfortunately it’s next-to-impossible to get a business loan without some form of credit check. However, if you’re worried that you won’t be approved for a business loan because of bad credit, the good news is there are still plenty of options for businesses with poor credit.
It’s also possible to check whether you’ll qualify for a business loan without going through a “hard” credit check. This means that you can check your eligibility for a loan without it affecting your credit score or appearing on your credit file for other lenders to see.
Lenders want to make sure that they’re only lending money to people and businesses that will ultimately be able to pay it back.
However, they have no real way of knowing if that’s the case without checking your credit score. They look at your credit history to assess how risky it will be for them to lend you money.
That’s why no responsible lender will offer you a loan without running some kind of credit check. However, that doesn’t mean you can’t get a loan at all. It just means you’ll need to approach the problem differently from business owners who can boast a spotless credit record.
If you have a low credit score, you might have to agree to certain terms before you can be accepted for a loan. These can include:
Here is a list of business lending options that are still available to those with poor or limited credit:
| Type of finance | Security | Repayment terms | Good for | Bad for | |
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| Business line of credit | Revolving | Secured or unsecured | Flexible – but the longer you borrow, the more you’ll pay |
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| Overdrafts | Revolving | Unsecured | Flexible – but the longer you borrow, the more you’ll pay |
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| Bad credit business cards | Revolving | Unsecured | Flexible – no interest is charged if you pay monthly |
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| Invoice financing | One-off | Secured against your invoices | Short-to-medium terms – tied to invoice payments |
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| Merchant cash advances | One-off | Unsecured | Short-to-medium terms – tied to credit card takings |
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| Asset financing | One-off | Secured against business assets | Medium-to-long terms – usually repaid in monthly instalments |
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| Short-term business loans | One-off | Unsecured | Short terms – usually repaid in monthly instalments |
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| Business loans | One-off | Secured or unsecured | Long terms – usually repaid in monthly instalments |
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It depends on the lender, but the following are all likely to affect your business’s chances of getting credit:
If you’re struggling to get a business loan, you could consider applying for a business credit card instead. This offers a more flexible way to borrow and could help you build your business credit score so that you can secure a loan in the future.”
While there’s no real way to get a business loan or finance without a credit check, it’s still possible to check your eligibility for a business loan without it appearing on your credit file. It can also be worth speaking to a specialist online lender as they might be more willing to offer you a business loan with poor credit – though be prepared to pay higher interest rates.
Access a lump-sum of funding upfront for a fixed cost and then repay when your customers pay you.
Boost your spending power, track employee spending and enjoy perks and rewards with a business credit card.
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If you run a small business and need to borrow money, you may be asked to give a personal guarantee. We’ve looked at how it works and what risks it carries.
Unsecured business loans allow you to access business finance without using assets as collateral.
Information about the many business loans available from Nucleus.
Borrow up to £500,000 from Fleximize as an SME or up to £1 million+ as a more established business. Find out how other lenders compare.
Although you may be able to get a personal loan to start or grow a small business, most lenders state that their personal loans cannot be used for this purpose.