Can You Get a Small Business Loan With No Credit Check?

Experian Information Solutions, Inc. | June 7, 2022 | 177 views

Can You Get a Small Business
As a small business owner, finding capital to build your business is one of your top priorities. But if you don’t yet have a business credit history and your personal credit history needs some work, it can be difficult to get approved for most business financing options. You can still find a way to get a business loan with no credit check, but it will likely cost you more to do so.

There are some business funding options you can pursue that may not require a business credit check. Here’s what you need to know about those options and how to improve your chances of getting affordable financing for your company.


How a Business Loan Differs From a Personal Loan

Some new business owners use personal loans to start a business. Both personal loans and business loans typically require a credit check, but some business lenders may review both your personal credit score and your business credit history. If your business is new, or if you are a sole proprietor, your personal credit history will be more heavily relied upon.


Business loans and personal loans differ in the following ways:

  • Collateral: While most personal loans are unsecured, many small business loans require that you put up collateral. Additionally, many commercial lenders also require a personal guarantee, which means that you’re personally liable to pay back the debt if your business can’t pay.
  • Building credit: Personal loans can be a great way to build your personal credit score, but small business loans are better if you want to build a business credit history. Keep in mind, though, that not all commercial lenders and financing options will report to the commercial credit bureaus. Do your research to make sure you’re getting credit for your on-time payments.
For both personal and business loans, there are some alternative financing sources that don’t require a credit check at all. These loans typically involve some risk, and you’re likely to pay more in interest rates and fees on the loans.


Business Financing Options That Don’t Require a Credit Check

Standard business loans from a bank, credit union or even online lender typically require a credit check. If your credit is less than stellar, these may be out of the question. However, there are other funding options to consider that might be a good fit for your needs.


Microloans

Microloans are small-dollar loans offered by nonprofit organizations that are designed to help new, small or disadvantaged businesses. These loans often don’t require a credit check, and they may even charge low-interest rates or no interest at all.

That said, they’re typically reserved for startups, and you may need to meet other requirements, such as having family members and friends act as peer-to-peer lenders . Also, loans are typically capped at $10,000 to $15,000, depending on the organization.


Vendor Credit

If you regularly purchase supplies or inventory from vendors, you may be able to set up a trade credit account with them. This can allow you to pay your bill 30 days or more after your purchase date. In some cases, vendors will report your payments to one or more of the commercial credit bureaus including Experian.

That said, some vendors may require a credit check—or at least a history of on-time payments with other vendors —so you may need to shop around to find one that will work with you.


Invoice Factoring

If your business gets paid by clients through invoicing, this could be worth considering. Invoice factoring involves a small business owner selling an invoice to a factoring company in exchange for an upfront payment based on a percentage of the invoice amount.

In return, the factoring company takes over collecting the payment from your client, after which it pays the remaining balance minus fees and interest.

Invoice factoring doesn’t require a credit check because it’s not technically a loan. It can be an easy way to get paid faster for work you’ve already done, but it’s important to note that it could impact your relationship with your client, especially if they pay late or have a poor experience with the factoring company.


Merchant Cash Advance

A merchant cash advance (MCA) is also technically not a loan; rather, it’s an advance on your future sales. In exchange for an upfront payment, MCA providers will take a percentage of your daily credit and debit card sales or a fixed daily or weekly payment from your bank account.

MCAs can be easy to get, even with bad credit, because the provider is more concerned about your sales record than your credit history.

That said, merchant cash advance APRs can climb into the triple digits if you’re not careful, so it’s generally best to avoid them in most cases.


Make It a Goal to Build Business Credit for the Future

Even if you need a business loan with no credit check right now, it’s a good idea to prioritize building both your personal and business credit to widen your selection of options in the future. It can also help you qualify for lower interest rates and better repayment terms.

Review your personal credit report and credit score to see what steps you can take, such as paying down credit card balances, getting caught up on past-due payments, disputing inaccurate credit report information, and more. You may also opt to get a secured credit card to add a more positive payment history to your credit file.

For your small business, make sure you’re working with lenders that report your payments to the credit bureaus. Many lenders that don’t check your credit don’t do this, so you may need to establish your business credit profile before you can start building your business credit.

As with your personal credit, it’s important for your business to pay its bills on time and avoid overextending itself on debt payments. While you might have a hard time getting a bank loan, you can start with business credit cards and vendor credit and then build from there.

Spotlight

Domestika

Online since 2002, Domestika is the largest and most influential Spanish-speaking community for creative professional. In Domestika creative professionals can share their projects, contribute and learn in forums, connect with other creatives, and find employment. Domestika brand has a remarkable and growing influence on the industry and a specialized audience that extends beyond their own website.

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How to Choose the Right Small Business Accounting Software?

Article | November 25, 2022

Introduction With increasing complexities in financial management and migration towards digital technologies for accounting operations, advanced accounting solutions are gaining massive traction across the small business sector. Accounting software assists small businesses in enhancing their financial performance by providing higher accuracy, optimized payroll, automated transaction tracking, centralizing financial records, and others. However, it is crucial for small businesses to integrate the right accounting software as per their requirements to get the most out of the solutions. Since the market is full of numerous accounting solutions with different capabilities, selecting the one that is most suitable for your business can be overwhelming. So what are the factors that a small business owner should consider before looking for an accounting solution? Let’s see below. Select the Right Accounting Software: The Top 5 Primary Factors to Consider for Small Businesses Types of Software With multiple types of accounting software available, such as system software, application software, cloud-based software, and others, small business owners can opt for solutions that suit their operations and working style. If the owners operate in an on-the-go style, cloud-based software is best for them. But if the owners prefer to work from a single location, then the system software is appropriate for them. Learning Curve Until and unless small business owners are aware of the ins and outs of accounting software, using the software may seem complicated. As the high complexity of the solutions can result in costly errors, these owners should make sure that the learning curve for operating the software is not too steep. Features List Before small business owners start reviewing various types of accounting software platforms, they should take the time to brush up on the basics. It is crucial for the owners to make sure that the accounting solution has all the functionalities and features they need, such as inventory management, multi-currency support, payment processing, expense tracking, and others. They should also consider the add-on features that the solution provider can offer. Software Cost Accounting software varies in cost, depending on the number of users it supports, its tools and features, and other factors. The more specialized the software is, the more expensive it gets. Small business owners should compare prices between various accounting software providers and understand the exact amount and the process by which they will be charged. For instance, some of the companies charge standard monthly fees, while others have a single upfront cost with additional charges for add-on services. They should also find out if there are any hidden charges associated with the setup, customer support, and cloud storage. Customer Support A huge part of a reliable accounting solution is customer service. This is because small business owners need quick solutions and answers if they get stuck or have any questions related to the software. They do not want to be bounced around from representative to representative when reaching out for support. Thus, the owners should look for accounting software that offers excellent customer support and service. While selecting the solution, they should research and read customer testimonials about the software’s customer support. Begin Your Accounting the Right Way Efficient accounting is a crucial part of financial management, which involves tracking critical business activities such as accounts receivable and payable, invoicing and billing, bank reconciliation, reporting, and tax compliance, among others. It can be difficult for small businesses to get everything right, yet good accounting is fundamental for the company's growth and success. Choosing the correct accounting software is a crucial first step when getting started with the discipline. To get the most out of your accounting software, it is essential for small businesses to carefully consider their requirements, check the availability of features as per the requirements, and then select the accounting software that provides the capabilities they require for the greatest accounting experience.

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How Are Small Business Accounting Software Meeting the Industry Needs Today?

Article | November 25, 2021

Introduction Every business owner wishes to become financially independent when starting a business. To achieve that, it is crucial for the owners to manage their finances in an efficient manner. When done wrong, financial management, which is supposed to make a company's budgeting processes more efficient, has led to the loss of funds in many cases. Without sound financial management, small businesses may struggle to meet their objectives and might even suffer losses that could push them into insolvency. Financial management assists businesses in maximizing their market share, minimizing capital expenditures, maintaining proper cash flow, and improving profits. Accounting software plays a significant role in proper financial management and has become a vital need for all businesses today. With a better understanding of the inefficiencies of manual bookkeeping and the increased chances of error in finance tracking, business owners are increasingly shifting from managing finances manually to leveraging innovative solutions, such as accounting software, to improve their financial management. Why Is Small Business Accounting Software a Need for the Industry Today? In the course of a typical day, there are numerous tasks and responsibilities that must be managed and accomplished by small businesses by the end of the day. From planning to managing finances and accounting, a small business owner's back is full of a plethora of day-to-day tasks. As a result, keeping track of every last detail is nearly impossible for them, especially in accounting, where keeping track of every transaction is critical for managing business operations. Accurate and reliable accounting management is critical for small businesses and start-ups to ensure stable cash flow. As accounting software helps small business owners keep track of every single transaction along with other benefits, such as managing business finances, understanding profitability, and preparing tax statements, among others, it is becoming a necessity for small business financial management. Here are some of the other reasons why small business accounting software is becoming a necessity in the industry. Overcoming Manual Records With the growing number of transactions in the small business sector, it is becoming increasingly difficult for business owners to track and record income and expense data. As accounting software assists these owners to overcome manual work by recording the data directly into the page in real time and keeping a daily update of all the transactions, it is increasingly being sought by small businesses. Ease in Maintaining Transaction Due to the increasing customer inclination towards the adoption of digital payment solutions, small businesses are encountering numerous obstacles in maintaining all transactions from different online portals. Accounting software helps businesses leverage the bank feed feature to connect credit card accounts and the business bank, thereby centralizing and maintaining all transactional data in one place. Preparation of Reports and Financial Statements Keeping track of all small and large transactions and preparing financial statements, such as profit and loss statements and balance sheets, of these transactions manually is a tedious task and prone to errors. Accounting software automates the preparation of these financial statements and allows comparing transaction activity from prior months and years. As a result, it is increasingly gaining acceptance among small business owners. Increases Efficiency Accounting software allows small businesses to manage invoices and expenses, prepare for taxation, and keep tabs on all the financials, including payments, bad debts, upcoming dues, employee salaries, and others. Delegating all these financial management responsibilities to accounting software enables small business owners to focus on tasks that require their undivided attention, thereby boosting business efficiency. Bottom Line Regardless of the size of the business, every company strives to optimize its financial management, improve efficiencies, minimize costs, and simplify complex and tedious tasks. Accounting software can help small business owners achieve these objectives, along with eliminating time-consuming manual processes and redundancies, by automating accounting practices. Following this, the growing introduction of advanced cloud-based accounting software capable of providing real-time data access to business owners from anywhere at any time and on any device is expected to change the ways accounting is done in the small business industry in the coming years.

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5 Tax-Related Resolutions for Smarter Small Business Accounting in 2020

Article | November 15, 2022

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Article | February 11, 2020

This is the first post in a seven-part-series detailing the biggest entrepreneurial mistakes business owners make. The series will run over the next few weeks so check back to learn more. These are the 7 Biggest Mistakes I have seen entrepreneurs and companies make that can devalue their Intellectual Property (“IP”) portfolio, damage their brand, or sink a deal. If you are considering turning your idea into a business, read this carefully first. There are other mistakes you can make, but these are the deal-breakers. Any one of these can cost you big bucks, credibility in the eyes of investors and potential partners, and ultimately lead to evaporation of the value of your idea.

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Domestika

Online since 2002, Domestika is the largest and most influential Spanish-speaking community for creative professional. In Domestika creative professionals can share their projects, contribute and learn in forums, connect with other creatives, and find employment. Domestika brand has a remarkable and growing influence on the industry and a specialized audience that extends beyond their own website.

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Multiple SBA & Valley Small Business Lending Awards for Oak Valley Community Bank

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On 09 January 2023, Oak Valley Community Bank, a wholly-owned subsidiary of Oak Valley Bancorp, was recognized as the "Most Active SBA 504 Lending Partner" by Success Capital - Certified Development Corporation and the "Most Loan Guarantees Funded & Largest Total Dollar Aggregate Funded" by Valley Small Business Development Corporation during the most recent Success Capital and Valley Small Business fiscal years. Oak Valley’s team offered $13 million in SBA 504 loans through Success Capital, and it aided the funding of $27 million in total projects, resulting in the creation or retention of approximately 100 small business jobs. Oak Valley Community Bank winning the "Most Active SBA 504 Lending Partner" award marks its 7th consecutive win. In addition, senior vice president and commercial banking officer Jeff Hushaw received the accolade of "Most Active 504 Lender" in 2022, both of which cover lending activity in San Joaquin, Merced, Stanislaus, Tuolumne, Mariposa, and Calaveras Counties. It is the first time the bank has received the Valley Small Business accolade. The Oak Valley team funded over $3.5 million in Valley Small Business guaranteed loans for the year. The SBA 504 and Valley Small Business lending programs offer loans to develop small businesses. Success Capital offers low down payment and fixed-rate financing via the SBA 504 Loan Program for business owners to purchase or construct facilities for their businesses. Similarly, Valley Small Business facilitates direct lending and guarantees loans to small businesses or family farms to ensure increased access to capital. About Oak Valley Community Bank Headquartered in Oakdale, Oak Valley Community Bank specializes in commercial lending, commercial banking, SBA lending, business banking, small business lending, agricultural lending, treasury management, commercial real estate financing, CRE lending, and Ag Lending, offering its plethora of products to individuals and small businesses. With 30 years of history, it has transformed from a single-branch operation in Oakdale to 18 locations and nearly $2.0 billion in assets.

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