Your personal credit score is often one of the main factors business lenders consider when you apply for a loan. While not as important as it might be with a personal loan, it can impact your rate, loan amounts, terms and even what types of financing your company can qualify for. And in some cases, your business credit score might come into play as well.
Is there a minimum credit score to get a business loan?
No, there’s no one minimum credit score for all business loans. But most business lenders have a minimum personal credit score requirement that you’ll have to meet to qualify for a loan. You can sometimes find out what a provider’s credit requirements are by visiting its website — especially if it’s an online lender. Otherwise, you might have to call or visit a branch to learn if you’re eligible.
I have business partners. Do their credit scores count, too?
Likely, yes. Most lenders consider the credit scores of all partners who own 20% or more of the business. Often, you’ll all need to meet the minimum credit requirement to qualify.
What’s a good credit score for a business loan?
Lenders generally consider a credit score of 670 or higher to be good credit. But the higher your credit score is, the more options you have. A higher score also means you’ll be eligible for rates below average business loan rates.
Larger loan amounts might also have higher credit requirements. If you’re interested in borrowing close to the maximum a lender offers, reach out to make sure your credit is strong enough to qualify. If your credit score is at 670 or higher, read our guide to the best good-credit business loans to compare our top picks.
What are my options based on my credit score?
The types of business loans available to you might vary depending on your credit score, though there’s no one specific cutoff — it varies by lender.
Good to excellent credit: 670 to 800
Term loans from banks, online lenders and credit unions
Lines of credit
SBA loans
Equipment financing
Vehicle financing
Invoice factoring
Invoice financing
Merchant cash advances
Credit scores in this range will put most business loan options on the table. An excellent credit score (750 or higher) gives you access to traditional bank loans and bank lines of credit. A score in the mid-600s and up opens up SBA loans, including SBA loans through banks and online lenders. Borrowers with these scores can also choose from term loans, lines of credit, equipment or vehicle financing and more.
Fair credit: 580 to 669
Term loans from online lenders
Lines of credit
Equipment financing
Vehicle financing
Invoice factoring
Invoice financing
Merchant cash advances
With fair credit, your choices are slightly more narrow. You may not meet the cutoff for the SBA loan credit score requirements — most lenders require a score of 640 or higher. And you could struggle to meet the credit score for a small business loan with a traditional bank or some of the more selective online lenders. However, you can strengthen your chances of approval by backing your loan with business or personal assets.
Poor credit: 300 to 579
Equipment financing
Vehicle financing
Invoice factoring
Invoice financing
Merchant cash advances
When your credit score drops below 580, your main options are loans that are backed by some kind of collateral. These include merchant cash advances (MCAs), which are loans against your future credit card sales, as well as invoice factoring or invoice financing. You could also possibly qualify for an equipment or vehicle loan, since these are backed by collateral. But APRs can run high with these options, especially MCAs.
What about my business credit score?
Most businesses that have taken on debt financing also have a business credit score. In some cases, this can affect whether you’re approved for a business loan and how much financing you receive. While your personal credit score is attached to your Social Security number, your business credit score is attached to you by an Employer Identification Number (EIN).
To establish or improve your business credit score, you must apply for a business loan from a lender that reports to business credit bureaus and make on-time payments. You can find out your business credit score by contacting credit bureaus like Equifax, Experian or Dun & Bradstreet.
Do I need a business credit score?
You don’t necessarily need a business credit score to get a business loan, though some do. But if you have a high business credit score, it won’t hurt – and your options aren’t necessarily limited if you don’t.
What affects a business credit score?
Like your personal score, your business credit score fluctuates as you do business. Business credit bureaus analyze aspects of your business’s credit history that include:
Credit inquiries and applications. Your credit shopping patterns can affect your score depending on the frequency and type of credit.
Payment history. If you’re slow to pay your existing debt obligations, you might see a lower credit score. But overall responsibility and a healthy credit utilization ratio could outweigh a blip or two.
Years in business. A lender may consider a newer business riskier than one that’s been around longer.
Black marks on your credit. Defaults, judgments and bankruptcies can mar your score. Liens, lawsuits and delinquent taxes on the public record can also affect your score.
Your company’s details. Aspects of your company’s structure play into your score, like your legal name, line of business, directors and shareholders and even business classification codes.
What other factors do lenders consider?
Your credit score might be important to your business loan application. But it isn’t the only factor lenders consider. Here are a few other details they’ll look at:
Revenue. Most businesses lenders have a minimum revenue cutoff — and also require you to show that you bring in enough money each year to afford repayments.
Time in business. Many lenders want your business to have a track record of at least a year — though at least three years is ideal.
Net operating income. In addition to revenue, most lenders will consider how much money you have available after covering your day-to-day expenses.
Business debts. Lenders also typically ask about any outstanding debts in your business’s name. If your debts are equal to or more than your net operating income, you might struggle to qualify. Consider paying down some of your business debt before applying.
Collateral. Any business or personal collateral you can use to back the loan makes you less of a risk to a lender and can make up for a low credit score or short time in business.
Industry. If you work in what lenders consider to be a high-risk industry — like financial services or cannabis — you could have a hard time qualifying for some types of business loans.
While there’s no set minimum credit score for a business loan, your options might be more limited depending on your rating. And while your business credit score won’t necessarily factor in, your business partners’ personal credit ratings typically will. You can find out more about how to finance your company with our guide to business loans.
Frequently asked questions
Can I get a business loan without a credit check?”
Yes, it’s possible to get a business loan without a credit check. In fact, some types of business loans don’t require a credit check at all because they’re an advance on future earnings. But these tend to have a higher cost than lenders that do run a credit check, so they might not be the best choice — even if your credit isn’t perfect.
Is there a minimum credit score for SBA loans?
The SBA doesn’t have a set minimum for its loans, but generally its lenders require a score of 660 or higher for all owners with a 20% stake in the company — just shy of good credit. It also might consider your business’s credit score, depending on the type of loan. Read our guide to SBA loans to learn more about what to expect.
Do I need good credit for a startup loan?
Not necessarily. But having good credit is a little more important when applying for startup financing, since you don’t have a business track record to go off of. If your credit isn’t great, you might want to consider other types of financing like crowdfunding or angel investors.
Anna Serio was a lead editor at Finder, specializing in consumer and business financing. A trusted lending expert and former certified commercial loan officer, Anna's written and edited more than 1,000 articles on Finder to help Americans strengthen their financial literacy. Her expertise and analysis on personal, student, business and car loans has been featured in publications like Business Insider, CNBC and Nasdaq, and has appeared on NBC and KADN. Anna holds an MA in Middle Eastern studies from the American University of Beirut and a BA in Creative Writing from Macaulay Honors College at Hunter College, CUNY. See full bio
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Anna has written 238 Finder guides across topics including:
Kat Aoki was a personal finance writer at Finder, specializing in consumer and business lending. She’s written thousands of articles to help consumers make better decisions on their home loans, bank accounts, credit cards, cryptocurrency and more. Kat is well versed in working with leading brands in the real estate, mortgage and personal finance industries, and her expertise has been featured on Forbes Advisor, Lifewire and financial comparison sites like iSelect and realestate.com.au. She holds a BS in business administration from California State University, Sacramento and enjoys hiking and yoga in her spare time. See full bio
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Kat has written 195 Finder guides across topics including:
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