6 Ways to Borrow Money with No Business Credit History

A strong credit history is often a crucial factor when a company seeks to borrow money from traditional lenders. However, establishing a credit history can be a significant challenge for new companies or startups. But what does a company do with no business credit history? Let’s find out the answer!

What to do with no business credit history?

Without a proven track record of managing debts and repayments, businesses may face obstacles when securing loans from banks or financial institutions. The question arises: “How can a company lacking credit history borrow money to fuel its growth and expansion?” When a company is new and lacks a credit history, lenders may use alternative methods to assess creditworthiness. Here are some approaches they might take:

1. Personal Credit of Business Owners

If the company is a startup, lenders may rely on the business owners’ or founders’ personal credit histories. A solid personal credit score can positively impact the company’s chances of getting a loan.

Credit scores are a way to measure how good someone is at managing money and paying back debts. The higher the score, the less likely they will have trouble paying their bills. For example, In Canada, a fair credit score is between 600 and 659, while below 600 is considered poor. In the third quarter of 2023, about 4.7 percent of Canadian mortgage holders had a fair or poor credit score.

2. Business Plan and Projections

Lenders may carefully review the company’s business plan and financial projections to gauge its potential for success. Check out the tips on how to prepare an excellent business plan, we prepared earlier. A well-thought-out plan with realistic revenue forecasts can boost the company’s credibility. When applying for a loan, borrowers are typically required to specify the purpose of the loan in their loan application or business plan.

3. Collateral or Guarantees if Lack of Credit History

Offering valuable assets or personal guarantees from business owners can provide additional security for the loan, even without a credit history. In some cases, business owners might offer personal guarantees, demonstrating their commitment to repaying the loan.

A mortgage is a loan used to finance the purchase of real estate, such as a house or a property. Banks, financial institutions, or mortgage lenders typically offer it. When someone takes out a mortgage, they borrow a specific amount of money to buy the property, and the property itself serves as collateral for the loan.

Check the number of mortgage sales in the United Kingdom between 2014-2021. In 2021, the United Kingdom (UK) witnessed over 1.2 million mortgage sales (PSD) annually. Among these, the significant majority were obtained by individuals with an unimpaired credit history.

4. Industry Analysis

Lenders might consider the industry in which the company operates and its growth potential. A promising industry outlook can bolster the case for lending.

5. Startup Loan Programs

Some national banks and financial institutions offer specific loan programs tailored to assist new businesses with limited credit histories. (including Small Business Administration (SBA) loans, working capital loans, term loans, and equipment loans. )

6. Alternative Lenders

If traditional banks are hesitant to lend due to the lack of credit history, the company can explore options with alternative lenders with more lenient eligibility criteria.

Alternative lenders are financial institutions or online platforms offering loans and financing options outside traditional banks. They cater to individuals and businesses needing help qualifying for loans through conventional channels due to limited credit history, poor credit scores, or unconventional financial circumstances.

These lenders often use innovative underwriting methods, leveraging technology and alternative data sources to assess creditworthiness and provide personalized loan solutions. Alternative lenders play a crucial role in expanding access to credit and fostering financial inclusion for a diverse range of borrowers.


New companies need to be transparent and prepared when applying for a loan. Providing detailed financial projections, a solid business plan and relevant industry data can strengthen the company’s case for creditworthiness. Building relationships with lenders and demonstrating a commitment to responsible financial management can also improve the company’s prospects for securing funding early in its business journey.


About Author

Ben Adam is a dedicated in-house copywriter at Wittix, a leading money transfer services company. With a passion for crafting compelling content and respect for clients, Ben has created engaging and informative articles that captivate readers and provide valuable insights into finance, money transfer, and related topics.

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