Is It Possible to Apply for Long-Term Installment Loans with No Credit Check?
Key Takeaways
- Long-term loans allow businesses to take advantage of high funding amounts with low-interest rates and longer repayment periods. Since there’s a high risk involved in the financing, lenders require borrowers to undergo extensive background checks, including credit checks.
- If you want to move forward with your long-term business loan application, having a good credit score, high annual revenue, and at least two years of business history will help increase your odds of approval.
- If you prefer to skip the credit checks, financing options such as invoice financing and merchant cash advances would be a viable alternative, but these options usually come with a higher interest rate.
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Long-term loans are among the most common and affordable business financing options that businesses apply for to fund large investments, like real estate or equipment. When approved, the company can borrow high amounts with a maximum repayment period of 25 years (or 30 years for some lenders).
Banks and other alternative lenders are typically cautious about who they lend money to, especially if it involves large amounts. That said, entrepreneurs seeking large funding amounts will have to go through a lengthy application process, including a financial background and credit check.
So, is it possible to get long-term installment loans with no credit check?
The short answer is no. There’s just too much risk involved in the arrangement that lenders won’t be able to forego the credit checks.
If you want to apply for business financing, you’ll have to choose whether you want to prioritize the no-credit-check aspect of applying for funding, or take advantage of the features of long-term loans.
If you choose the latter, we’ll outline what long-term loans are and what you need to qualify for one. If you have a low credit score or want to skip the credit check altogether, we’ll also discuss alternative loan options that typically won’t require borrowers to undergo a credit check.
Let’s start.
What is a Long-term Loan?
The SBA Loan application process typically consists of four stages:
Long-term loans can be a viable financial resource if you’re looking to boost your company’s cash flow. With one, you can get a lump sum of cash from the lenders (up to $5 million), then repay the borrowed amount within a specific time frame, or term.
Long-term loans have a repayment period of 3 to 25 years (sometimes 30 years if the borrower has a stellar financial and credit standing). Once approved, the loan’s proceeds can go towards long-term business initiatives like opening another branch, adding staff, product expansions, equipment purchases, and more.
Rates for long-term loans are among the best – with some hovering between 4% to 30%. Banks offer the lowest interest rates for long-term loans, but they will require you to prove your creditworthiness in order to qualify for the financing.
What You Need to Qualify for Long-Term Business Loans
Qualifying for long-term loans can be challenging. Since it involves large amounts of financing, banks and other lenders want to ensure that they’ll be taking as little risk as possible, and that means lending to creditworthy borrowers.
In proving your creditworthiness, you’ll have to show the lenders you’re doing well with regards to:
- Credit score
- Annual revenue
- Time in business
1. Good or Excellent Credit Standing
For most cases, lenders will require borrowers to present a good credit standing when applying for long-term business loans. They want to make sure that they’re working with reputable and responsible clients who will be able to pay the money back in full and on time. Your credit score will give the lenders an idea of how you handle your financial obligations.
In general, lenders will require borrowers to have a credit score of at least 680. Essentially, the higher your credit score is, the better your chances are of qualifying for long-term business loans.
2. High Annual Revenue
Lenders will also look at your annual revenue to examine your business’ financial health. Again, they want to make sure that the risk they’re taking will be worth it and that they will get their money back. By looking at your financial statements, banks and other lenders can determine whether you’ll be able to afford the loan repayments and have enough left to spend on other business expenditures.
3. Time in Business
In addition to annual revenue, some lenders may require businesses to be in operation for a specific time. In general, companies that have been in business for at least two years and have been generating substantial revenue have higher chances of qualifying for long-term business loans.
Some lenders may automatically disqualify borrowers that haven’t been operational for a specific length of time. With that, it might be worth considering your time in business before moving forward with your application.
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Best Lenders that Offer Long-Term Loans
Now that we’ve established what you need to qualify for long-term loans, you might be wondering where you can get one.
One thing worth noting about long-term business loans is that it’s among the most difficult business financing options to qualify for, and the application process can be lengthy. However, once you get approved for the loan, you can take advantage of perks like higher loan amounts, longer repayment periods, and low interest rates.
If you’re planning to apply for long-term loans, here are the top three lenders to consider:
1. Bank of America
When it comes to long-term loans, banks are known to offer the best loan terms. If you haven’t established a relationship with any banks within your locality, you might want to consider applying for a long-term loan with the Bank of America.
One of the most popular financing products they offer is the Business Advantage Unsecured Term Loan, which allows businesses to borrow money without collateral. Once approved, they can provide up to $100,000 in funding, which companies can use as working capital.
Since it’s an unsecured loan, won’t the interest rates be higher? Unlike other lenders, Bank of America offers low interest rates for their unsecured business term loans. In fact, their interest rates can go as low as 4.75%, which is among the lowest rates for unsecured business loans out there.
For the bank to consider you for the funding, you need:
- A credit score of 700 or better
- A strong history of business financials
- Be operational for at least two years
2. Celtic Bank
If you’re looking to apply for a long-term loan backed by the federal government, applying for one at Celtic Bank would be your best bet.
SBA loans are government-backed loans. The Small Business Administration (SBA) works with reputable lenders who underwrite the loan to small businesses. They guarantee a portion of the loan, and in turn, this guarantee incentivizes the lenders to extend loans to small businesses (since banks are known to be strict when it comes to small business loan applications).
With SBA loans, specifically the SBA 7(a) and SBA CDC/504 Loan programs, borrowers can get up to $5 million in funding. These loans have a repayment period of 10 to 25 years, depending on the loan amount, purpose, and the business’ credit and financial performance.
The SBA also caps off the interest rate that the lenders can charge, ensuring that the loans remain affordable for small business owners. Usually, the interest rates for SBA loans range from Prime Rate + 2.75% to Prime Rate + 4.75%.
To qualify for the SBA’s loan programs, you’ll have to meet both the lender’s and SBA’s established eligibility criteria. For the SBA, you’ll need to meet the following requirements:
- Must be a for-profit business
- Must do business within the US or its territories
- You must have at least two years of business history
- Have reasonable equity invested in the company
- Not delinquent on other government loans
- No available credit elsewhere
Additionally, Celtic Bank will require you to meet the following eligibility criteria for their SBA loans:
- A personal credit score of 640 or better
- Minimum annual revenue of $50,000
- Business must be operating for at least two years
SBA loans are known for their long approval process. The typical SBA loan timeline is between 60 and 90 days. That said, if you’re looking for a faster way to access funding, this might not be the best financing solution for you at the moment.
3. Funding Circle
For borrowers looking for a lender that offers an expedited loan approval and a streamlined application process, alternative lenders might be a better choice than banks. In that case, Funding Circle can be an excellent option.
If you apply for a long-term loan from Celtic Bank, you can get approved for loan amounts between $25,000 to $500,000 which can have a maturity period of six months to five years. The interest rate can vary, but you can expect it to be within 4.99% to 22.99%.
Among alternative lenders, Funding Circle offers financing terms that can compete with what banks provide. They’re also more lenient when it comes to the business’ qualifications, and their loan application process is more streamlined.
You can apply for Funding Circle’s long-term loans online. You’ll only have to fill out a form, upload a copy of your tax returns, bank statements, credit and financial documents, and other required paperwork on their database. The fastest turnaround time for the loan is one day.
Another feature that makes Funding Circle more superior to other alternative lenders is that they don’t require their borrowers to have a minimum annual revenue. So as long as you can prove your company is profitable, you’ll have better chances of getting approved for long-term loans.
Funding Circle will require you to meet the following eligibility criteria:
- A personal credit score of 620 for partnerships, LLC, and Corporations; 660 for sole proprietors.
- At least two years of business history.
If you want to pay your loan in full before the set schedule, you can freely do so as Funding Circle does not charge any prepayment penalties.
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Alternative Financing Options to Long-Term Installments with No Credit Check
What if you prioritize the no-credit-check over the benefits of long-term business loans?
In that case, you’d be glad to know that there are financing options that might skip the credit check altogether. For these types of business loans, lenders may be willing to forego the credit check as repayments will heavily rely on the business’ revenue and for the majority, the business’ clients’ credit scores.
Alternative financing solutions that won’t require credit checks include invoice financing and a merchant cash advance. Here’s a breakdown of how each of these funding options work.
Invoice Financing
Businesses that offer a 30 to 90 days payment period for their customers often experience cash flow shortages as most of their capital is tied up in their accounts receivables. Invoice financing allows businesses to advance up to 95% of their invoice’s value and avoid cash flow issues.
With invoice financing, the financing institutions are more concerned about the creditworthiness of the applying business’ customers since the payment would come from them. That said, they might be willing to skip the credit check for the business. However, the financing institution would require the business’ clients to be creditworthy before the invoices can be eligible for financing.
When applying for invoice financing, be prepared to pay higher interest rates and fees. Since the lenders are facing a significant risk by skipping the credit check, they will have to find other ways to mitigate the risk.
Some lending institutions may specialize in a certain industry and offer affordable rates to businesses, so it might be worth considering looking into those.
Merchant Cash Advance (MCA)
Merchant Cash Advances (MCAs) allow businesses to advance cash based upon their future credit card sales. The company receives a lump sum upfront, which is then repaid by automatically deducting a percentage of their future credit card sales. That said, this type of financing is viable for businesses that deal with large volumes of credit card sales each month. This includes retailers, wholesalers, and other service-based companies.
With an MCA, many providers are willing to overlook the credit check to gain the upper hand from competitors. Moreover, the lenders are more likely to focus on your business’s monthly credit card sales than your personal or business credit standing.
Merchant cash advances can come at a higher rate than other financing options – even higher than invoice financing. With that, you might want to consider other types of financing before opting for a no credit check merchant cash advance.
When applying for a merchant cash advance, be sure to inquire from different lenders and compare their offers. This is one of the best ways to ensure that you won’t end up draining your cash flow for repayments.
Ready to apply for a Long-Term Installment Loan?
Is It Possible to Apply for Long Term Installment Loans With No Credit Check?
Unfortunately, there’s no such thing as long-term installment loans with no credit check. Because of the risk involved, all borrowers looking for long-term business loans will have to undergo a thorough background check to qualify. In most cases, the most creditworthy customers, or those with a high credit score, significant annual revenue, and at least two years of business history, have higher odds of qualifying for the financing.
On the other hand, there are alternatives that you can consider if you need access to funding as soon as possible, but don’t want to submit to credit checks. This includes options like invoice financing or merchant cash advances. However, expect to face a high-interest rate and other charges in exchange. If you think you can afford the repayments, then it would be a viable funding resource. Otherwise, consider building your credit first before applying for long-term loans to take advantage of the flexible financing terms.
Ready to apply for a Long-Term Installment Loan?