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Are credit checks required for MCA’s?


If you are a small business owner with a poor credit history, you probably know how difficult it can be to obtain a business loan through conventional means. Most traditional lenders rely primarily on your credit record when deciding whether to accept your request for a loan, and if it doesn’t make great reading, you will probably be swiftly turned down. Fortunately, there is still hope for you to secure funding. A merchant cash advance may be the way to go, and although you can’t obtain a merchant cash advance with no credit check whatsoever, the credit check will not be the be-all and end-all when it comes to accessing your business.

You can still get the application approved on the basis of a holistic view of your business performance, rather than your credit history alone. Lenders will look at things like how long you’ve been trading, the reasons behind any red flags in your credit report, and your recent monthly revenue. This makes it easier to be approved for funding even if your credit score isn’t great.



Article Content


  1. What is a credit check?
  2. Can I get a Merchant Cash Advance without a credit check?
  3. Why is a credit check so important?
  4. Why might you need a no credit check merchant cash advance?
  5. You still have options


What is a credit check?


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A credit check is when a company views information from your credit reports to gain an understanding of your finances. They require a legitimate reason to do this, like if you apply for a loan, but they don’t necessarily need your consent. There are two general types of credit check:


  1. Soft credit checks: a look at certain excerpts from your credit report to determine the likelihood of success in an application without closely examining your credit history. These aren’t visible to companies, and will not have an impact on your overall credit score.


  1. Hard credit checks: a hard credit check is an exhaustive search of your credit report. These searches will be visible to other companies, and if you have too many hard checks over a short period of time, your credit score can be negatively impacted for six months.


When a lender performs a credit check, they will usually look for certain specific details to ascertain whether you are a good candidate for finance. This will include things like:

  • Loans, credit cards and mortgages that you currently have open, or have closed in the last six years.
  • Details of past occasions where you have missed repayments.
  • Details of any past County Court Judgements (CCJs).
  • Any times you have been declared bankrupt.



Can I get a Merchant Cash Advance without a credit check?


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In a word: no. There is no UK lender that will completely disregard the importance of performing a credit check before granting finance. However, different lenders will have different eligibility criteria, so just because you were refused finance by one company, this doesn’t mean you won’t be able to obtain finance from another lender. There are certain national regulations that must be adhered to by any lender, and performing credit checks is part of being a responsible lender. Without them, people in severe financial difficulties could obtain finance in a state of desperation and exacerbate their financial woes.



Why is a credit check so important?


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In a nutshell, credit checks are important because they safeguard consumers against making poor credit decisions and entering into unaffordable credit obligations. Lenders need to get a detailed overview of your credit history to see how well you’ve coped with your financial obligations in the past. If it’s clear that you’re taking a significant risk in trying to obtain finance, it is the responsibility of the lender to make an informed decision about whether or not that risk is too great. This is not just about protecting the lender’s own investment; it is about protecting consumers as well, because there have already been too many stories about people collapsing under insurmountable debt.



Why might you need a no credit check merchant cash advance?


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There are many reasons why you may be looking for a merchant cash advance with no credit check. Perhaps you already know that your credit history is not good, or you’ve been turned down for a business loan after a hard credit check. Maybe you’ve just checked your credit file yourself and noticed that you have poor credit. It could be that you missed a payment or entered an unarranged overdraft. Whatever the reason, if you are seeking to obtain finance without a credit check you will have your reasons, and it is likely that you need the capital for an imminent business expense.



You still have options


Business Owner


If you’ve found out that your credit rating is poor, and are now learning that no lender will grant finance without performing a credit check, you don’t need to despair just yet. You may still be eligible for a merchant cash advance even with poor credit. As previously stated, when you apply for an MCA the lender will take a more holistic approach to assessing whether or not you are a good candidate for finance. At Capify, we do take credit checks into account, but our primary criteria are:


  • You must have been in business for over six months
  • You must be taking over £5,000 per month in card transactions


We will look at the big picture that is your business, and make our decision taking every factor into account. We are a responsible lender and will look carefully at your credit report, but we will also ask questions about how/why any negative elements came to be. Just because you missed a payment, that doesn’t mean that you will ALWAYS miss payments, and when examining potential candidates for an MCA we will be sensitive to the wider story.

Capify are a business loans and merchant cash advance lender. We’ve been in this business for more than 10 years, pioneering the MCA option and leading the way in helping small business owners access the funding they need. If you would like to learn more about applying for an MCA with Capify, please visit this page. Alternatively, you can contact us today and we’ll discuss the ins and outs of your needs in detail.



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