Small business owner building credit for their new small business

Can You Get a Small Business Loan with No Credit?

5 min read • Jan 03, 2020 • Grant Olsen

Business credit and loans have always gone together. Why are they linked? In some ways, it’s not too different from renting a helicopter. Many helicopters having price tags over $1 million, so the owners are understandably cautious about who they let take the controls. The risk is too high for them to be overly generous.

Before you rent a helicopter from any company, they’ll carefully review your past training and experience. Close attention will be paid to where you got your pilot license, how many hours you’ve spent airborne, and if you have any major blemishes on your track record. Assuming you’ve maintained a solid record, you’ll get approved to fly the rental helicopter.

Your business credit is like the financial version of the qualifications and flight history of a pilot. It reflects your payment habits and gives a clear view of your borrowing potential. The importance of credit in business can’t be overstated, as it allows you to stay competitive and grow your company. With each passing year, your attention to detail allows these benefits of building business credit to become more secure and available.

Securing Business Credit and Loans Opportunities

Of course, you must have a business to have business credit. Once you’ve created a plan and set up your business, it’s time to begin opening business accounts and moving things away from your personal finances. Only when your business finances are separate will your credit be rewarded for your positive actions.

Here are 5 crucial steps in this process:

  1. Incorporate your business as a legal entity such as a corporation or limited liability company.
  2. Go to and set up an Employer Identification Number (EIN).
  3. Register with the Dun & Bradstreet Corporation, which is a major business credit bureau, to receive a DUNS number. Your credit history can be tracked and viewed by lenders after it’s been added to their database.
  4. Leverage your EIN and DUNS numbers to open a business checking and business savings account.
  5. Get a secured credit card for your business’s smaller purchases. While these cards have a low credit limit, they’re ideal for those who are just getting their businesses off the ground.

Taking these steps creates the foundation upon which you will build your business credit. Your EIN, DUNS number, and incorporated name are the identifiers that allow your business transactions to benefit your credit score. With every successful transaction, your reputation grows. And your creditworthiness will be relevant to far more than just prospective lenders—you’ll find that consumers, business partners, investors, and suppliers are more willing to collaborate if you have a solid score.

Sustaining a Positive Credit Score

As anyone with an unused gym membership knows, it’s relatively easy to show up for something the first couple of times. What’s difficult is getting to the gym after several months. Get out of the habit and it’s tedious to right the ship.

Likewise, it takes effort to keep your credit score healthy. Your payments need to be consistent, and you should avoid borrowing more money than you can reliably repay. Once your track record shows several months of perfect payments, you can ask for an increase to the limit on your credit card. Regardless of whether you need the extra money, the higher limit boosts your credit utilization ratio, which is a crucial metric in assessing your score.

“To demonstrate that you are financially responsible, you need to develop a financial track record in good standing,” says Forbes. “Your payment history is one of the largest components of your credit score. To ensure on-time payments, set up autopay for all your accounts so the funds are directly debited each month. FICO scores are weighted more heavily by recent payments so you can ‘override’ a missed payment by developing a pattern of more recent on-time payments. Therefore, if you have a delinquent payment, pay off the balance.”

When it comes to your credit score, every positive action yields a positive result. A single payment to a lender might not move the needle in a substantial way, but it still adds one more piece of evidence to your case for being a reliable borrower and trusted partner.

Here are some of the diverse ways a healthy score can benefit your business:

  • Easier expense tracking
  • Better access to capital
  • More likely to get approved for business loans
  • Access to lines of unsecured credit
  • Improved cash flow
  • Lower financing on lease equipment
  • Lower financing when purchasing company vehicles
  • Earn rewards such as travel miles and gift cards

Low Credit Score Small Business Loans

While a healthy credit score should always be the goal, entrepreneurship is a volatile ride with peaks and valleys. In other words, if you’re in the small business world, you have likely experienced financial setbacks that have impacted your credit.

So can you get a small business loan with no credit? Yes, there are low credit small business loans that have a lower barrier of entry and are ideal for those who are trying to get their business off the ground.

  1. Business lines of credit: This option doesn’t need a high credit score. For business line of credit applications, the lender will make sure you’ve been in business for 6 months or longer, bring in at least $50,000 a year, and have a credit score above 559.
  2. ACH loans: With this type of loan, the qualification hinges more on your business’s current and future performance than its past. So lower credit scores won’t necessarily be deal breakers.
  3. Merchant cash advances: Here’s another financing option where your business performance takes center stage. A merchant cash advance allows you to borrow against your future earnings, so your history is less important.

Although these borrower-friendly small business loans can help you access capital, their higher rates and stricter repayment terms usually prevent them from being long-term solutions. Use them as a launchpad for your business, then focus on getting to a point where you can enjoy the benefits of building business credit and gain access to more loan options.


Grant Olsen

Grant Olsen is a writer specializing in small business loans, leadership skills, and growth strategies. He is a contributing writer for KSL 5 TV, where his articles have generated more than 6 million page views, and has been featured on and Grant is also the author of the book "Rhino Trouble." He has a B.A. in English from Brigham Young University.