When it comes time to qualify for a business loan, your credit score is one of the top factors that lenders consider.
The U.S. Federal Reserve Banks lays out the general rule for the small business lending industry:
- Low credit risk: 80–100 business credit score or 720+ personal credit score.
- Medium credit risk: 50–79 business credit score or a 620–719 personal credit score.
- High credit risk: 1–49 business credit score or less than 620 personal credit score.
Borrowers who are low credit risks get the most choices of loan products and the best terms. Borrowers who are high risk have few choices and will pay the most. Getting even a small loan for business could be tough for high-risk borrowers.
A good credit score can make all the difference in your business. To learn how to improve your score, check out the attached PDF, provided by the NorCal SBDC.