A business credit score can impact your ability to obtain small business financing or a small business loan. Credit scores are only one part of the loan process – cash flow, time in industry, and other factors are taken into account – but they are still important to understand.
If you don’t know your business credit score, you can turn to one of the major credit reporting bureaus. Keep in mind that unlike personal credit scores, which are done on a consistent scale, different credit bureaus have different scales for business credit. To figure out your business financing potental, here is a breakdown of the Experian scale, which pulls credit scores on a scale of 0-100:
- 0-15 — High Risk: It’s likely you could encounter problems obtaining small business financing and you should focus on rebuilding your business credit.
- 16-30 — Medium to High Risk: This score would represent a moderate risk to lenders. Obtaining a loan in this range likely won’t present much of a challenge.
- 31-80 — Good Credit: This range constitutes good credit scores. Businesses falling in this range can typically expect most requests for financing to be approved.
- 81-100 — Excellent: If your business credit score comes in over 80, you are in fantastic shape and you can consider this one less barrier to obtaining financing.
Remember, it’s important to understand your credit scores and the role they play in your loan application process.
OnDeck is a Google Ventures-backed company with an A+ Rating with the Better Business Bureau. The company offers small business loans nationwide to over 725 different industries.