5 Types of Small Business Startup Loans with No Credit Checks:
When a budding entrepreneur qualifies for a small business guaranteed loan, they may panic at the thought of undergoing a credit check. If the check wouldn’t be too stringent and the loan won’t greatly affect your credit rating, you may want to consider taking the loan.
However, there are several startup loans for new businesses that may not require a credit check at all. One could also consider these options if they have a low rating or lack any sort of credit history in the first place.
Below are some financing alternatives that work as startup loans for businesses that want to avoid credit checks:
1. Crowdfunding
Crowdfunding has gained quite a lot of popularity in recent years. It’s helped several entrepreneurs to launch their creative innovations and make their ideas a reality.
With crowdfunding, one could make use of anyone who believes in them and their efforts. Family, friends, potential customers, small investors, and even complete strangers can hence donate the capital one needs.
The most popular platforms for crowdfunding are Kickstarter, GoFundMe, and Indiegogo. With these, one can easily start a campaign to reach interested backers. They can use social media, email, and several other methods to get both capital and feedback from several individuals.
There are two kinds of crowdfunding to consider for currently new ventures:
Donations: When there’s no personal motive for people to contribute, their investment is more of a donation. This is the best option for disaster relief teams, community services, nonprofits ventures, etc.
Rewards: Entrepreneurs could try to attract investments by offering rewards in return. These could be a free product or service when they do get off the ground.
Equity: Crowdfunding projects could also attract backers by offering them equity or securities in the company. They would invest with the expectation of getting some sort of return from the established company.
2. Grants for Small Businesses
Business grants can be especially tailored for small businesses. These are quite useful since one doesn’t have to repay them. All one has to do is qualify. However, this is far from easy.
Governments at all levels—local, federal and state—can make several types of grants available for launching an expanding small businesses. The twist? These are usually only for certain industries or causes that are government-approved, such as medical research, conservation, or scientific endeavors.
3. Nonprofits/Microloaning:
Small business owners that cater to minorities or hail from underprivileged areas may qualify for microloans or nonprofit help. When organizations provide this sort of baking, they don’t usually look at credit history.
Hence, one should think about seeking lenders who won’t look at their own monetary benefit in giving loans. They are mostly interested in strengthening weak areas of society and marginalized entities.
4. Love Money
Love money is known as the investment one gets from friends, family, or spouses. If you have a trustworthy, hardworking, and creative image in your social circles, your loved ones could get you the capital you so badly need.
However, the investors here are still risking their valuable assets on you. Be sure to let them know just what they could stand to lose as well as gain. Plus, be transparent in your future plans about what to do with these loans or straight-out donations.
5. Credit Cards for Businesses
A business credit card is easier to obtain than the traditional startup loan. If your credit history isn’t that great, you may hence want to consider the card option.
Business credit cards could challenge your credit score, so they may be shunned by many small business owners. Still, such credit cards could be just the lifesaver you need to launch a business properly. The bank that issues this credit card would look at the owner’s individual credit rating rather than that of the business. This could give us some advantage, since a new business naturally won’t have any credit history.
If nothing else, a new business may actually consider business credit cards because of this leniency. While there would be a credit check, the card would be easier to obtain than one may expect. There’s certainly no harm in trying for one!