Say Goodbye To Credit Checks! With Private Lenders, No Credit Check is Needed.

By: Aaron Robbins0 comments

Bad credit can happen to the best of us. A less-than-glowing credit history is often par for the course when it comes to business ownership, as businesses often experience large fluctuations in financial buoyancy.

If you need business finance, but don’t want a credit check to be the roadblock that prevents you from moving forward, a private lender can help. We discuss how below.

What is a poor credit score?

Your credit rating is a number between 0 – 1,000 or 1,200 (depending on the credit reporting bureau). Generally speaking, a credit score under 500 is considered a bad credit score.

Before assuming that your credit score is dismal, it pays to check what your credit rating, and your business’ credit rating is, to know what you’re working with.

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Checking your credit score

Checking your business credit score through a lender or bank can actually work against you, as this would constitute a credit check and be added to your list of credit enquiries, which can negatively impact your credit file further!

Credit reporting agencies in Australia are required to provide a free copy of your credit report once every 3 months.

What causes bad credit in businesses?

Similar to personal credit scores, a business’ borrowing history will weigh heavily on its credit score. Particularly for businesses that struggle through seasonal industries, or who have been impacted by business interruptions such as natural disasters and the COVID-19 pandemic, a low credit score was unavoidable as they grappled with lost revenue.

Falling behind on existing business loan repayments, or getting your business deep into credit card debt or (or taking on an expensive personal loan such as a payday loan) is not uncommon for business owners in a downturned environment.

How private lenders can help businesses with a bad credit history

Whenever you borrow money, either personally or through your business, most lenders will perform a credit check. Regardless of whether you’re approved for the loan or not, that credit enquiry will remain on your credit file. Multiple or frequent credit enquiries can actually negatively impact your credit score, making it even more difficult to be approved for finance in the future.

Private lenders, however, do not need to perform credit checks! This is because private lending isn’t bound by the same rigidity that traditional lenders such as major banks are. Instead, private lenders can offer finance that’s based on your business’s future rather than its borrowing history.

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How can private lenders offer no credit check loans?

Generally speaking, private lending is secured using an asset as collateral, such as residential or commercial property. The private lender works to devise a suitable exit strategy for the loan. By focussing on how the loan is to be repaid, rather than looking at the business borrower’s financial past, an exit strategy and repayment schedule can be determined.

Who is eligible for a no-credit-check loan?

If you’re looking for business loans with no credit check, private lending is a form of business finance, therefore, Australian business owners who hold property or other business assets are typically eligible to access a no-credit-check loan.

Are no-credit-check loans guaranteed to be approved?

In Australia, there are no loan products that come with guaranteed approval — including no-credit check loans through private lending. Private lenders still need to make sure that your business is able to repay the loan, and that you can satisfy their conditions for lending.

Typically, however, private lenders offer much more flexible lending criteria than traditional lenders.

What are the loan terms for private loans?

Private lending often offers short-term loans for business purposes. At Diverse Funding Solutions, we offer over 20 different forms of private lending solutions with terms ranging from a couple of months, right up to 3 years.

Will a private lender ever need to look at my credit report?

There is every chance that a private lender may wish to look at your credit report as a part of the loan application process. However, the difference is that unlike traditional lenders, even if they discover a bad credit rating, they can work with you to devise an appropriate repayment schedule and exit strategy (which determines how the loan is to be repaid and contingency planning).

This method means that the results of your credit check can be somewhat overlooked, and you can get your loan approved despite having a poor credit history.

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Are the interest rates higher for private loans?

You may be familiar with the reputation of ‘no-credit-check personal loans’, ‘payday loans’ or any other ‘bad credit loan’ product coming with exorbitant interest rates. This simply isn’t the case with private lending.

In fact, Diverse Funding Solutions can access some of the most competitive interest rates in the private lending market, thanks to having over 200 of Australia’s best private lenders at our fingertips!

Are private loans the same as personal loans for bad credit?

Personal loans are a lending product that are offered to individuals, not businesses. Private lending is designed for businesses, and therefore private loans aren’t the same as personal loans for bad credit.

The ‘private’ in private loans can trick people into thinking they are the same as a personal loan, however, ‘private’ simply means the finance is offered through a private source rather than a traditional lender.

How to get approved for finance with a private lender

If your business needs an injection of working capital, or perhaps the finance to make your expansion plans a reality, Diverse Funding Solutions can help you source the most appropriate finance solution with a fast loan approval process (and a competitive interest rate!). With access to over 200 of Australia’s top private lenders, we can help guide you through the entire process.

Regardless of whether your business has a good credit score or not, contact Diverse Funding Solutions to see how we can help your business propel forward with finance.

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