What Credit Score Do You Need for a Business Loan in 2026?

Credit scores are often the first thing business owners worry about when applying for financing. And for good reason — your credit can significantly impact what options are available and at what rates.

But here is what many people do not realize: credit requirements vary dramatically by loan type, and strong business fundamentals can sometimes offset credit weaknesses. Let me break down what you actually need.

Personal Credit vs. Business Credit: What Lenders Check

First, let us clarify the two types of credit that matter for business lending:

For most small business loans under $500K, your personal credit score is what matters most. Lenders check business credit when it exists, but they rely primarily on personal credit because many small businesses have thin or no business credit history.

Credit Score Requirements by Loan Type

Here is what different types of business financing typically require. Note that these are general ranges — individual lenders may have stricter or more flexible standards:

What Your Credit Score Really Means

Let me translate what different credit ranges typically mean for your business loan options:

750+ (Excellent)

You have access to essentially all financing products at the best available rates. Banks compete for your business. SBA loans, conventional bank loans, and premium online lenders are all realistic options. Focus on finding the best terms rather than worrying about approval.

700-749 (Good)

You qualify for most financing products. SBA loans are accessible, though you may not get the absolute best rates. Bank loans are possible with good business fundamentals. Online lenders will actively compete for your business.

650-699 (Fair)

SBA loans become more challenging but not impossible — you will need strong cash flow and time in business to compensate. Bank loans are difficult unless you have an existing relationship. Online lenders and alternative financing become your primary options, at rates 2-5% higher than prime borrowers.

600-649 (Below Average)

Traditional bank financing is largely off the table. SBA loans require exceptional compensating factors. Online lenders will work with you, but expect rates in the 15-25% range for term loans. Equipment financing remains accessible since the equipment provides security. Revenue-based products become more attractive.

Below 600 (Poor)

Options narrow significantly. Merchant cash advances, revenue-based financing, and invoice factoring are the primary paths — all at higher costs. Some equipment financing may be available. SBA Microloans through community lenders might be an option if you have a solid business plan and can demonstrate ability to repay.

When Revenue Compensates for Credit

Here is good news if your credit is not perfect: strong revenue and cash flow can sometimes offset credit weaknesses. Lenders call these "compensating factors."

• High revenue relative to loan size — Requesting $100K with $1M revenue is less risky than $100K with $200K revenue
• Consistent cash flow — Predictable monthly deposits show ability to make payments
• Long time in business — 5+ years demonstrates staying power despite credit issues
• Substantial collateral — Assets that secure the loan reduce lender risk
• Industry stability — Being in a resilient industry helps your case
• Low existing debt — Room to add debt payments improves approval odds

Real example: A business owner with a 620 credit score but $800K in annual revenue, 4 years in business, and strong bank statements may get approved for a $150K term loan that someone with the same credit but $300K revenue would be declined for.

Building Business Credit

If you want to eventually rely less on personal credit, start building your business credit profile:

• Get a D-U-N-S Number — Register with Dun & Bradstreet (free) to establish a business credit file
• Open trade accounts — Vendors that report to business credit bureaus (office supplies, shipping, etc.)
• Get a business credit card — Use it, pay it on time, keep utilization low
• Pay vendors early or on time — PAYDEX scores reward prompt payment
• Establish business bank accounts — Keep business and personal finances completely separate
• Incorporate properly — LLCs and corporations build credit more easily than sole proprietorships

Improving Your Personal Credit Before Applying

If your credit needs work, here are the highest-impact actions:

The fastest wins: Paying down credit card utilization and disputing errors can often boost scores within 30-60 days. If you are 20-30 points away from a threshold, these actions might get you there quickly.

What If My Credit Was Damaged by COVID or Business Issues?

Many business owners had credit impacts from 2020-2022. Lenders understand this context:

• Be upfront about it — Explain the situation; lenders appreciate honesty
• Show recovery — Demonstrate that issues are behind you with recent positive history
• Document the circumstances — If pandemic-related, note that in your application
• Highlight current strength — Focus on current revenue, cash flow, and trajectory

Many lenders have become more understanding of COVID-era credit damage, particularly if your recent 12-24 months show clean payment history.

The Bottom Line on Credit Requirements

Here is my honest advice based on these credit ranges:

• 700+ credit: You have options. Focus on finding the best terms.
• 650-699 credit: You can get funded, but work on improving credit while applying — it may help with rates.
• 600-649 credit: Strong revenue and cash flow are essential to compensate. Expect higher rates.
• Below 600 credit: Consider whether waiting 6-12 months to improve credit makes financial sense. The cost difference can be substantial.

Remember: credit is one factor. Lenders also look at revenue, time in business, cash flow, and collateral. A complete picture of your business often matters more than any single number.