Quick Biz Capital Blog

What Credit Score Do You Need for a Business Loan?

Your credit score plays a role in business financing, but it is not the only factor. Different products have different requirements, and many options exist even for business owners with challenged credit. Here is a realistic breakdown of what credit score you need for each type of business funding.

No Minimum: Merchant Cash Advances

MCAs are approved based on your daily card sales volume, not your credit score. Even business owners with scores below 500 can qualify if they process enough card transactions. The trade-off is higher costs compared to other products.

500-579: Revenue Based Financing

Revenue based financing focuses on your monthly revenue deposits rather than your credit history. Many providers will work with scores in the 500s if your business shows consistent revenue of $15K+ per month and has been operating for at least 6 months.

580-619: Working Capital Loans

Working capital products become available in this range. Lenders look at a combination of credit score, bank deposits, and time in business. Having strong deposits can compensate for a lower score.

620-679: Lines of Credit and Term Loans

This is where more traditional products open up. Business lines of credit typically require 600-620 minimum, and term loans generally start at 620. You will see better rates and higher amounts in this range.

680+: SBA Loans and Best Rates

SBA loans and the most competitive conventional rates require 680+ credit scores. If your score is in this range, you have access to the full spectrum of products and should shop for the lowest cost of capital available.

How to Improve Your Score

If you are not in the range you need, focus on: paying all bills on time, reducing credit card utilization below 30%, disputing any errors on your credit report, and avoiding new credit inquiries. Even small improvements can open up new product options.