Credit score is one of the first things most lenders consider before preapproving borrowers for a loan.

Not only does an excellent credit score accelerate the loan preapproval process, but It also qualifies you for higher funding amounts than you’d normally be eligible for.

However, there’s no need to fret if your credit score is less-than-perfect. With some research and due diligence, you can access funding for your business even with a deplorable credit rating. Here are five intelligent ways to obtain financing without subjecting yourself to stringent credit checks.

1. Explore No-Credit-Check Loans

No-credit-check loans are exactly what the word implies – loans where credit checks are not a key eligibility criterion. They’re one of the most popular funding mechanisms for small business owners.

Most no-credit-check loans are installment loans, which means you repay the borrowed amount by making certain predefined monthly payments. The monthly installments vary from one lender to another and depend on the borrowed amounts. Accessibility is one notable benefit of small business loan no credit check. The apparent lack of credit checks makes these loans easy to qualify for and obtain. Despite your poor credit rating, you can also be eligible for higher loan amounts.

Most no-credit-check loans attract fixed interest rates, too.

However, lenders will still review your no-credit-check loan application based on other parameters. Factors like your annual revenue, debt-to-income ratio (DTR), and period of existence may all come into play before preapproving you for the loan.

You could even be asked to pledge collateral as security. So, ensuring that everything else works in your favor is important.

2. Tap Into Your Social Circle

Borrowing money from friends and relatives is a traditional way to raise capital for small businesses. Whether you’re a big corporation or sole proprietorship, it’s easy to find individuals within your social circle who are able and willing to finance your venture.

This small business funding model requires even less paperwork than no-credit-check loans.

Someone known to you won’t ask for official proof of your identity before lending you money. They might not even need to review your company’s books. You also enjoy remarkably low-interest rates when borrowing from family and friends. Depending on your relationship with the potential lender, interest may not be at all.

A flexible loan repayment period is another perk of seeking business funding from friends and relatives. More importantly, you won’t be subjected to any credit checks.

3. Consider Cash Advance Apps

Cash advance apps have democratized access to financing for small businesses.

These applications let you borrow money without subjecting you to the rigorous process of credit checks. That means you don’t have to wait longer in the queue to get preapproved, making them an excellent choice when you need funding to sort out an unforeseen expense.

Whether it’s paying an urgent order or meeting medical treatment costs, you can rely on cash advance platforms.

Most cash advance apps are reasonably user-friendly. No steep learning curve is involved in signing up for an account or applying for a loan. You can complete the process online within minutes, provided you’re connected to the internet.

Note, however, that cash advance apps let you borrow against your next paycheck. So, ensure you can repay the loan within a limited time before exploring this financing option.

4. Opt For Payday or Title Loans

Payday loans are similar to cash advances. The primary difference is that they’re mostly provided by mainstream lenders instead of peripheral credit companies.

On the other hand, title loans are secured by your vehicle’s title.

The securities involved in payday and title loans – your paycheck and car title, respectively – make them easy to qualify for. Lenders don’t have to conduct hard credit searches on borrowers. They only require evidence of the next payment and car title, whichever case applies.

Like cash advances, payday and title loans can be useful when you’re in a financial bind. The lack of credit checks and little paperwork make these loans easy to acquire. Conversely, payday and title loans generally attract high-interest rates. You must also repay the borrowed amount once within a reasonably short duration, or the consequences can be financially devastating.

5. Factor Your Invoices

Is your business in a financial fix due to outstanding accounts receivables?

If yes, then you may want to factor in your invoices.

Invoice factoring is an unconventional financing mechanism where a business sells its outstanding invoices to a third party (known as a factoring company).

The factoring company pays for most or all your receivable assets’ worth upfront. It then follows up the payment with your debtors.

Most invoice factoring companies don’t conduct credit searches. They may only need to review your payment history to determine if your debtors will honor their payments.

Invoice factoring is ideal when you need immediate cash without pressing your debtors for early payment. It also helps to establish a healthy peer-to-peer (P2P) relationship with the factoring company.

The Bottom Line

That you can access financing with a bad credit score shouldn’t discount the significance of boosting your credit rating. An excellent credit score makes it incredibly easy to obtain business loans even where other factors are working against you.

The easiest way to build your credit score is by making timely payments. You could also explore other interventions, such as debt forgiveness.