It is certainly possible to get a small business loan without the credit check, but the options may be limited and there may be a couple of other hoops to jump through. You might be better served to find a business partner who has faith in you and then have them apply for a loan instead. However, there are some available resources out there for almost anybody.
This is your most assured way of obtaining seed capital from the great Internet crowd of idle investors. It’s not even a traditional loan as such. Instead, you may promise a free product, or to send investors a gift, or share a stake in the profits, in exchange for your funding. Crowdfunding can be donation-based, rewards-based, or equity-based. Dreams are built out of crowdfunding, with hundreds of thousands of business ventures launched over the few years since crowdfunding became recognized.
IndieGogo and KickStarter are the two main venues, with a possible mention for Patreon. To start, you will need a “pitch,” in written or video form. You need a well-developed and clearly communicated business plan, exactly as if you were presenting to an investment firm. With Patreon, it is preferred that you have some media presence already through venues like YouTube, podcasting, or blogging, with some kind of content production as your business.
Even if these avenues are “without credit,” you come out miles ahead in crowdfunding if you have some kind of experience or record to bank on. A past successful business project is a huge headstart.
PayPal is the Internet’s own POS service, and with their support of eCommerce, it’s no surprise that they’re willing to fund small businesses through the platform. You will need a PayPal account at the business or premiere level for at least three months, with an existing cash flow of $15K-$20K minimum. PayPal’s Working Capital Loans process will lend you an amount up to 35% of your annual revenue through PayPal. The limit is $120K.
FundBox is a financial technology company that also produces a cash flow optimization program. If your business has outstanding invoices – that is, money from customers waiting to come in – you can leverage these for a loan on up to $25K in a line of credit. This functions similar to the concept of a payday loan, but for invoices instead of paychecks. You will need to register an account with FundBox and link your business receipts through the service.
American Express Business Loans
AmEx has collateral-free financing with a $50K cap for card-members. There are some eligibility requirements, but no hard credit check.
Small business grants
In the US, like most developed industrial nations, you can get something even better than a loan – an outright grant of free funding from the government or an organization! The catch is that these are specific to special cases and certain demographics. Here’s a quick list:
- Small Business Innovation Research – The SBIR is a government initiative to fund research and development that has commercial potential. Think inventors and patents. Grants run $150K to $1M.
- Small Business Technology Transfer – Just like the SBIR, but your business must be linked to a research institution.
- National Science Foundation – They accept proposals in the development of engineering, science, and medicine.
- National Institutes of Health – Grants to small businesses developing biomedical technology.
- Department of Energy – If your business involves energy production or waste reduction, they may be interested in supporting it.
There are dozens of more grants available, hundreds in fact. It takes a lot of research, but if you can alter your business aims towards a grant opportunity or find an existing grant that suits your business plan, you may have it even better than a loan you have to pay back.