What Credit Score Do You Need for a Small Business Loan?

A Straightforward Guide for New and Growing Businesses

If you’re thinking about applying for a business loan, one of the first things that might come to mind is: “What credit score do I need?”

It’s a smart question—and the answer depends on the type of loan, the lender, and how long your business has been operating.

In this post, we’ll break down what credit score is typically required for a small business loan, how personal and business credit both come into play, and what you can do to improve your chances—even if your score isn’t perfect.

What Kind of Credit Score Are We Talking About?

When lenders talk about your credit score, they’re usually referring to one of two things:

• Your personal credit score – Based on your individual credit history (FICO score, typically 300–850)

• Your business credit score – A separate score based on your business’s financial activity and credit use (ranges vary by reporting agency)

For most small business loans, especially if you’re a sole proprietor or new business, your personal credit score will matter most.

What Credit Score Do You Typically Need?

There’s no single cutoff, but here’s a general guide:

📌 Tip: Even if you’re under 600, you still have options—we’ll get to those below.

Do You Need Business Credit?

Not necessarily—especially if your business is new. Most lenders won’t expect you to have an established business credit score until you’ve been operating for a year or more.

That said, building business credit early can help you qualify for better rates later. You can start by:

• Getting a D-U-N-S number

• Opening vendor or net-30 accounts in your business name

• Using a business credit card and paying on time

What If Your Credit Score Is Low?

Don’t panic—there are still ways to qualify for business funding. Many lenders offer options that are based on revenue, not credit. Others will look at the bigger picture, including:

• How long you’ve been in business

• Your average monthly income

• Your current debt load

• How you’ll use the loan

You may also consider alternatives like:

• Merchant cash advances

• Invoice factoring

• Equipment financing (where the equipment serves as collateral)

• Credit card stacking (if your score is borderline but above 650)

How to Improve Your Credit Score Before Applying

If you’re not in a rush, improving your score by just 20–40 points could open more (and cheaper) funding options.

Here are a few quick wins:

✅ Pay down credit card balances

✅ Make all payments on time (set reminders or autopay)

✅ Check your credit report for errors at AnnualCreditReport.com

✅ Avoid applying for too much credit at once

✅ Keep old credit lines open (they help your credit age)

✅ Ready to See What You Might Qualify For?

Even if your score isn’t perfect, there are lenders who specialize in helping small businesses like yours move forward.

Download our Ultimate Business Funding Guide to learn more about funding options at every credit level.

Or Get Pre-qualified (below) and we’ll help you match with lenders based on your score, business stage, and funding goals.