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Home Business Loans Business Loans Guide Credit Score Requirements For A Business Loan
It’s no secret that it’s tough for Main Street business owners to get the financing they need to grow and operate profitable businesses. Most lenders (even non-traditional lenders) look at some of the same business loan requirements —they might just weigh their importance differently. Before you go into the bank, you’ll want to know where you stand with these four very important metrics:
Credit score is number one for a myriad of reasons. It’s the most important metric and is the cause of most rejections. Although there is hope for business owners with less than stellar credit, those options come with a cost. What’s more, on Main Street, most bankers are just as interested in your personal credit rating as your business rating—sometimes even more.
Lenders look at both business and personal credit scores when reviewing small business financing applications. Business credit is measured on a scale of 0 to 100, while personal credit scores range from 300 to 850.
A business credit score takes into account things like:
A personal credit score, on the other hand, analyzes information such as:
You don’t always need a business credit score in order to qualify for a loan to help your company. Different types of business financing have different credit requirements. SBA and term loans, for instance, place greater importance on credit score, while revenue-based and asset-based financing are typically more concerned with monthly and annual sales.
Here are the minimum personal credit score requirements for each type of business financing to get an idea of the options available to you.
If your credit score isn’t where you’d like it to be, there are several steps you can take to boost your score.
Depending on how bad your score looks today, you might need to invest some time—but there is hope. Just remember, your credit score is the first thing any lender will look at before they offer you a small business loan. Hopefully, some of these tips can help you resuscitate a bad credit score.
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*The information contained in this page is Lendio’s opinion based on Lendio’s research, methodology, evaluation, and other factors. The information provided is accurate at the time of the initial publishing of the page (Feb 22, 2023). While Lendio strives to maintain this information to ensure that it is up to date, this information may be different than what you see in other contexts, including when visiting the financial information, a different service provider, or a specific product’s site. All information provided in this page is presented to you without warranty. When evaluating offers, please review the financial institution’s terms and conditions, relevant policies, contractual agreements and other applicable information. Please note that the ranges provided here are not pre-qualified offers and may be greater or less than the ranges provided based on information contained in your business financing application. Lendio may receive compensation from the financial institutions evaluated on this page in the event that you receive business financing through that financial institution.
Lauren Ward is a personal finance and tech writer with a passion to help consumers make smart financial decisions. Her work has appeared in a variety of publications, including Time and MSN. When she's not writing, she loves gardening and playing board games with her family.
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