The minimum credit score requirements for business loans vary depending on the type of loan and the lender’s policies. Here are some general guidelines:
Small Business Administration (SBA) Loans: The SBA does not set a minimum credit score requirement for its loans. However, most lenders who offer SBA loans typically require a credit score of at least 680.
Traditional Bank Loans: Banks typically require a credit score of at least 680 to qualify for a business loan. However, some banks may require a higher score, depending on the loan amount and the borrower’s financial history.
Online Business Loans: Online lenders may have more flexible credit score requirements than traditional banks. Some online lenders may offer loans to borrowers with credit scores as low as 500, although these loans may have higher interest rates and fees.
Merchant Cash Advances: Merchant cash advances do not typically require a minimum credit score, but lenders will look at the borrower’s credit history and financial situation to determine eligibility.
It’s important to note that credit score is just one factor that lenders consider when evaluating loan applications. Other factors that may be considered include the borrower’s revenue, cash flow, and collateral.