Roughly 46% of startups report that they have trouble meeting payroll demands and purchasing inventory to sustain the business.
Many try to turn to traditional business loans to grow but face challenges like underfunded loans and bad credit scores. There are ways to overcome these challenges.
You just have to know where to look and what to do. Read on to learn how to get a no credit check loan so you can get working capital for your business.
What’s a No Credit Check Loan?
A no credit check loan is what you think it is. It’s a type of personal loan that doesn’t require a hard credit check. This can be huge for people that don’t have good credit scores.
You may be suspicious of a no credit check loan. They do tend to have higher interest rates, but they can give you cash for your business. These types of loans are becoming more common because more people have poor credit scores.
The average credit score for those between 35-44 is 629. That score is considered fair by the credit scoring agencies. It’s still low enough to get declined for a loan by traditional banks.
Getting a No Credit Check Loan
Lenders usually use the credit score to determine if you have the ability to pay the loan back. Since you’re not having your credit checked, how can lenders be sure that you’ll pay back the loan?
You have to be able to prove you have income by providing bank account information. The lender will check deposit statements to make sure you have money to pay the loan back.
They’ll have other requirements as well. You usually need to be a resident of the U.S. and be 18 years old. You can read more about these types of loans here and how you apply for one.
Finding a Lender to Work With
The most challenging thing about no credit check loans is finding a good lender. Many lenders deliberately work with people who have bad credit because they are high-risk borrowers.
They have very few options to get a loan and they’re not likely to repay them. Once a person falls behind on payments, they’re assessed fees that drive up the total amount of the loan.
You need to find a lender that offers competitive interest rates and is transparent about all fees. You’ll want to shop around with lenders first.
Ask them what the interest rate of the loan will be, the total cost of the loan (interest, fees, and principal), and all of the administrative fees.
Get Funding for Your Business
Your business may be struggling right now or you may want to grow your business. That can be difficult to do if you can’t get financing due to bad credit.
A no credit check loan could help you get the funds you need. You’ll need to prove your income to show you can pay the loan back. Make sure you find a lender that is completely transparent about the fees associated with the loan.
For more startup tips, head over to the Inspiration section of this site.