Can You Get Equipment Financing With No Credit Check?

Credit scores are a frequent roadblock for businesses when it comes to securing financing, and equipment financing is no exception. Whether you’re concerned that you won’t qualify or you just want to avoid hard pulls on your credit, you may be wondering if you can get equipment financing with no credit check.

What is no-credit-check financing? Is there such a thing as no-credit-check equipment financing? In this post, we’ll break down what to expect when it comes to no-credit-check equipment financing.

Can I Get Equipment Financing With No Credit Check?

It’s extremely rare to find true no-credit-check equipment financing. This applies both to equipment loans and equipment leases.

Despite having some security by using the equipment being purchased as collateral, both lenders and lessors almost always check credit as a part of the application process. A no credit check lease to own program is a rare find (if you can find one at all).

Why Equipment Lenders & Lessors Check Credit

Equipment lenders and lessors use credit checks to gauge how likely you are to pay back your loan. This has traditionally been the role of credit checks in all kinds of loans.

But shouldn’t the collateral reduce the need for a credit check? While it may seem that way, your credit score still matters. Collecting and reselling the equipment takes time and labor. The equipment’s value will often depreciate over time.

Financing options that rely less on traditional credit checks often focus more on your business’s cash flow and revenue.

What To Do If You Need No Credit Check Equipment Financing

If you can’t qualify for no-credit-check financing, you still have options.

Check Your Credit In Advance

Credit requirements can vary widely by lender. Many prospective borrowers may be ruling themselves out before they even get to the application process.

While requirements vary by lender, many equipment financing providers work with borrowers in the mid-600s and above. Higher scores generally improve your chances of approval and better rates.

Improve Your Credit Score

If you really need an equipment loan or lease and your credit score won’t allow it, you may want to focus on improving your score. As noted above, your score doesn’t need to be fantastic, just “good.”

Avoiding late payments, utilizing less of your credit, and opening a credit card account that you use responsibly can all help to heal your credit score. If you don’t have a credit score at all, consider getting a secured credit card. Check out more ways to improve your credit score to get started.

Avoid A Hard Pull On Your Credit

Some prospective borrowers don’t actually have bad credit. However, they are afraid of the negative effect that a hard pull on their credit can have on their score. Soft pulls, on the other hand, have less of an impact.

If you’re concerned about what type of pull a lender or lessor might do when you apply for an equipment loan or lease, it’s worth asking. You can also check our lender reviews. We make an effort to note the type of credit check a lender makes when you apply.

A single hard pull typically has only a small impact, so the danger comes more when you’ve recently applied for financing.

Use A Different Kind Of Loan To Get Your Equipment

You may be surprised to learn that you can finance equipment without getting an equipment loan or lease. In fact, there’s (usually) nothing stopping you from using a cash flow loan or a line of credit to buy equipment.

There are some downsides to this strategy in that you probably won’t have as long to pay off your loan as you would if you’d gotten equipment financing. Additionally, the equipment won’t be collateral, meaning there’s a higher chance you’ll have to sign a personal guarantee, which puts more of your assets at risk.

Get The Right Equipment Financing For Your Small Business

A credit check doesn’t necessarily have to mean the difference between getting the equipment you need and having to do without. With a little research, you can likely still find a way to finance the equipment you need.

When you’re ready to purchase your equipment, get off on the right foot by starting with the best equipment financing. Although these options won’t let you bypass a credit check, these lenders offer fast funding, competitive rates, and high borrowing limits to fit any situation. Good luck!