Yep, lenders will review your credit score when determining whether you qualify for a small business loan – but your score probably doesn’t matter as much as you think it does (phew).
While having excellent credit will typically help you access larger loan amounts as well as more favorable rates and terms, there are several other factors that can help you qualify. Lenders also look at your time in business, revenues, financial projections, assets, and more.
And many lenders don’t just look at your business credit, they also review your personal credit. For example, if you’re seeking a commercial mortgage loan or a short term loan, your lender may be more concerned with your personal finances.
If your credit score isn’t sky-high, don’t fret – there are plenty of financing options you can still qualify for, such as a merchant cash advance. If you need a small business loan now, choose a loan option that is a little more forgiving about your credit score, then make it a priority to build both your personal and business credit as you grow your business. This will help you improve the viability of your business and continue to qualify for even better loan options in the future.
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