Do You Know What Credit Score for a Business Loan is Necessary at an Online Lender?
You asked: What credit score for a business loan is needed? What’s the minimum? Here’s what we found out.
Note: all research is current to July 2022.
Lenders have various business loan requirements when it comes to options for a small business loan. We focused on online lenders for business finance.
But check at your neighborhood bank. Maybe you can get a better deal with a traditional lender if they know you and your reputation for paying back your debts.
Credit Score Requirements for Typical Business Financing Options
Rates and terms can vary dramatically. Here is a breakdown of what we learned.
| Type of loan | Provider | Max available | Speed of funding | Interest rate | Min personal credit score needed |
| Accounts receivable financing | Lendio | Tied to receivables | 24 hrs | Low as 3% | n/a |
| Business acquisition loan | Lendio | Up to $5 M | 30 days | Low as 5.5% | Credit check on business credit and personal credit for all 20%+ owners; no numbers listed. |
| Business credit card | Lendio | Up to $150k | 2 – 4 weeks | Up to 31% | 680 |
| Business LOC | Lendio | Up to $500k | 1 – 2 weeks | 8 – 24% | 560 |
| Business LOC | OnDeck | Up to $100k | 24 hrs | Starting at 35.9% | 600 |
| Business LOC | Bluevine | Up to $250k | 5 minutes | Low as 4.8% | 625 |
| Business term loan | Lendio | Up to $2 M | 24 hrs | Low as 6% | They check it but minimum not listed |
| Business term loan | OnDeck | Up to $250k | 24 hrs | Starting at 35% | 600 |
| Business term loan | Lending Club | Up to $500k | n/a | Varies; loans are through Accion | n/a |
| Commercial mortgage | Lendio | Up to $5 M | 45 days | Low as 4.5% | Based on business not personal credit but no numbers listed |
| Commercial real estate loan | Lending Club | Up to $10 M | 24 hrs | Fixed and floating options | n/a |
| Equipment financing | Lending Club | Up to $10 M | 24 hrs | n/a | n/a |
| Equipment financing | Lendio | Up to $5 M | 24 hrs | Low as 7.5% | 650 |
| Merchant cash advance | Lendio | Up to $200k | 24 hrs | Factor rate of 1.2 | n/a |
| SBA loan | Lendio | Up to $5 M | 1 – 2 months | Prime+ | 620 – 640 |
| SBA loan | Lending Club | Up to $15 M | n/a but expect a few months for SBA loans from any provider | Varies; can convert from fixed to variable. Numbers are about 3.5% | 660 |
| Short term loan | Lendio | Up to $700k | 3 – 7 business days | Low as 8% | 650 |
| Startup loan | Lendio | Up to $750k | 2 – 4 weeks | Up to 17% | 680 |
Credit Score Requirements
As may be expected, a lender with lower credit score requirements will tend to take longer to furnish funding. SBA loans are a special case—they’re slow for everyone.
The lowest listed credit score was 560 for a Lendio line of credit. And the highest amount available was $15 million for an SBA loan from Lending Club.
The lowest interest rate we could find was 3% for accounts receivable financing from Lendio. But it is possible that there are lower interest rates from another lender or for other lending products—we just couldn’t find that information readily.
Better personal credit scores tended to unlock better rates, longer repayment terms, and more available funds. For the most part, businesses did not realize a benefit for waiting for financing—except from the SBA.
That is, slower financing decisions did not translate into more cash. But waiting was, potentially, a way to get money even with bad credit.
What Credit Score is Needed for a Business Loan: Online Business Lenders and their Credit Score Requirements
Only sometimes will an online lender provide a loan if you have bad credit. Qualifications including yearly revenue and time in business can vary. So can the available amounts.
We researched the following online lenders. We asked about their programs, rates, terms, and features. Rates can rise and fall; this is normal when it comes to financing.
A Caveat
Investigate all online vendors which interest you. Make sure to confirm our numbers before requesting funding.
Here are the details. But keep in mind that numbers can and do change.
What Credit Score for a Business Loan is Required at BlueVine?
Contact Information
(888) 216-9619
They currently have seven offices in Redwood City, CA; Jersey City, NJ; Salt Lake City, UT; Austin, TX; Tel Aviv, Israel; Misgav, Israel; and Karnataka, India.
Details
BlueVine currently offers lines of credit only.
But your small business must be operating or incorporated in an eligible US state. Currently, every state is eligible but Nevada and the Dakotas.
The business must have revenues of $10,000 or more per month. This works out to $120,000 per year.
You must be in business for at least 6 months. The company must be a corporation or an LLC. No bankruptcies in the past year. The business must be in good standing with the Secretary of State.
You will need to have a 625 or better FICO score for a line of credit. Provide a bank connection or bank statements for the past 3 months. Bluevine will be looking at your cash flow.
Caveats
There are certain industries Bluevine will not work with. They currently are:
- Illegal gambling
- Pornography and paraphernalia
- Political campaigns
- Firearms and paraphernalia
- Illegal substances
- Other controlled substances (including medicinal marijuana, marijuana, cannabis, and hemp) and paraphernalia
- Financial Institutions and lenders (including insurance, penny auction companies, and cryptocurrency)
- Donation-based non-profits
- Auto dealerships
Fees
BlueVine offers a true revolving line of credit for up to $250,000. Get decisions as fast as five minutes. Rates go as low as 4.8%.
But your business must have revenues of $10,000 or more per month.
There are no maintenance fees. You must have a consumer credit score of 625 or better.
So one advantage is how easy and fast their loan application is. Interest is fairly low. You can get a line of credit with a 625 or better FICO. But there are a few disadvantages. But you can’t use their services if your business is not incorporated, or is located in Nevada, North Dakota, or South Dakota.3:30:00
What Credit Score for a Business Loan is Required at Lending Club?
Contact Information
(888) 596-3157
Their office is in San Francisco, CA.
Details
Lending Club offers term loans, SBA loans, commercial real estate loans, and equipment financing.
Get a quote in 24 hours. There are no prepayment penalties.
Lending Club loans carry APRs of 6.34% – 35.89%. Origination fees run 2% – 6%.
Term Loans
Get up to $500,000 with fixed monthly payments and 1 – 5 year terms. There are no prepayment penalties. These loans are through Accion.
SBA Loans
Get an SBA loan for up to $15 million. Lending Club offers 7(a) and 504 loans, and SBA Express lines of credit. Terms generally run to 10 years although 25 year terms are available for real estate loans.
But you must have a 660 personal credit score or better.
Note: SBA loans always take a while to be approved. Expect to wait a few months.
Commercial Real Estate Loans
Get up to $10 million with terms up to 10 years and “competitive fixed and floating rate options”. You can potentially syndicate to larger loans.
Equipment Financing
Get up to $10 million with terms of up to 84 months (7 years). But you must be able to prove sales of over $10 million.
So advantages are that Lending Club decisions are quick. Funds are available fast. But disadvantages include high max rates. And when it’s a part of qualifying they have high annual revenue requirements.
What Credit Score for a Business Loan is Required at OnDeck?
Contact Information
(888) 269-4246
Their office is in New York, NY.
Details
OnDeck offers term loans and lines of credit.
Term Loans
Get up to $250,000. Interest rates start at 35% APR. Terms are up to 24 months.
You will need at least a FICO score of 600 or better. You must be in business one year or more. But your business must have yearly revenue of $100,000 or more. OnDeck requires a business checking account.
They will be looking at your cash flow. It’s hard to determine from the information given if this is an unsecured business loan.
Lines of Credit
Get a line of credit for up to $100,000. There is a repayment term of 6 months.
You will need at least a FICO score of 600 or better. You must be in business one year or more. But your business must have yearly revenue of $100,000 or more. OnDeck requires a business checking account.
Rates start at a 35.9% APR. But the average rate for lines of credit is 47.14% APR.
So advantages include they will accept a low FICO score for term loans and lines of credit. But disadvantages are the max APR for both term loans and lines of credit are high. If your company cannot pay back a loan or line of credit, it could sink you financially.
What Credit Score for a Business Loan is Required at Lendio?
Contact Information
(855) 853-6346
They are located at:
4100 Chapel Ridge Road, Suite 500
Lehi, UT 84043
Details
Lendio currently offers:
- Business Lines of Credit
- SBA loans
- Short term loans
- Merchant cash advances
- Business term loans
- Business credit cards
- Equipment financing
- Commercial mortgages
- Accounts receivable financing
- Startup loans
- Business acquisition loans
Business Lines of Credit
So, business lines of credit give you access to working capital when you need it. You can use your line of credit for most business needs, and you pay interest only on the funds you use.
Get up to $500,000 in 1 – 2 weeks. These loans have a 1 – 2 year maturity. But interest rates run 8 – 24%.
Minimum Credit Score Needed
You’ll need to have a credit score of 560 when applying because often a lender will look for that as a minimum. You’ll also want to have at least six months in business, and a minimum of $50,000 in annual revenue.
So, this is a decent form of business financing if you have bad credit.
SBA Loans
SBA loans are offered by lenders and backed by the U.S. Small Business Administration (SBA). Lendio has several different SBA loan options, including SBA 7a, SBA 504, and SBA Express loans.
Get up to $5 million but it will take a good 1 – 2 months. Loan terms run 10 – 30 years. The interest rate you pay ties to the Prime Rate.
You must be in business for at least 2 years to get these small business loans.
Minimum Credit Score Needed
According to Investopedia,
“The Small Business Association (SBA) does not specify a minimum credit score required to secure an SBA loan. However, SBA loans are provided by lenders who may have minimum score requirements. Typically, this minimum is 620 to 640.”
Short Term Loans
Get up to $700,000 in 3 – 7 business days. Small business loan terms are 3 – 10 years. But you’ll pay interest of 8 – 36%.
Minimum Credit Score Needed
Lendio says:
“If you’ve got a credit score under 650, you would probably be better off pursuing other forms of short-term financing like a business line or merchant cash advance, or waiting until you improve your credit score to apply for funding.”
In other words, bad credit will not cut it.
Merchant Cash Advances
Use merchant cash advances to borrow against your future earnings and get up to $200,000 in as little as 24 hours. Pay a factor rate of about 1.2. But you will need to provide:
- Proof of time in business
- Business bank statements
- Your business credit score
- Your business plan
- Bank statements
- Your balance sheet
Lowest Credit Score Needed
While there is no information on a personal credit score, when Lendio compares MCAs to other types of lending, it notes that you will need at least a 560 to get business lines of credit.
Lendio will be looking for proof of cash flow.
In general, a bad credit history will be acceptable for getting this type of business financing. But any lender—even an alternative lender—will have their limits when it comes to poor credit.
Business Term Loans
This standard small business loan option offers fixed interest rates, regular repayment terms, and a fixed maturity date.
Get up to $2 million in as little as 24 hours. Loan terms are 1 – 5 years. Pay interest rates as low as 6% for these small business loans.
Minimum Credit Score Needed
Lendio asks for your personal credit score but does not seem to list a minimum. However, it is doubtful that they would accept bad credit scores.
Business Credit Cards
Lendio offers more than one business credit card, including cards with rewards. But you’ll pay interest rates of up to 31%.
Lowest Credit Score Needed
You’ll typically need a credit score of 680 or higher to qualify for a Lendio credit card. But if your business has been in business long enough to have developed a credit history of its own, that may help.
As a result, better business credit might be able to offset poor credit on the personal side.
Equipment Financing
Because business equipment varies so much between industries, you can choose from more than one equipment financing option for your small business.
Get up to $5 million in 24 hours. Loan terms are 1 – 5 years. Pay interest rates as low as 7.5%.
Minimum Credit Score Needed
You must meet these requirements:
- At least 12 months in business
- $50,000 or more in annual revenue
- Credit score of 650 or higher
Hence, poor credit scores will not be accepted.
Commercial Mortgages
A commercial mortgage can help you buy, build, expand, remodel, or refinance. Hence it’s a secure piece of collateral, typically has low interest rates, and helps you start earning equity.
Get up to $5 million in 45 days. Loan terms run 20 – 25 years. Pay interest rates of 4.25 – 6%.
Minimum Credit Score Needed
Because a commercial mortgage is an asset-based loan, the loan amount and rate will largely be based on your business credit score and the value of the property a small business is using as collateral.
Yet there does not appear to be a minimum personal credit score requirement.
Accounts Receivable Financing
While you’re waiting for Net-30 receivables to roll in, use accounts receivable financing to get an advance from a lender on the money you’re owed for completed services.
Get up to 90% of receivables in 24 hours. Loan terms go up to a year, with rates as low as 3%.
Minimum Credit Score Needed
Per Lendio, “your credit rating isn’t very relevant. Why not? Because the factoring company will be more focused on the credit of the company that owes you money, as it’s the crucial factor that determines how likely the factoring company is to get paid once ownership of the invoice has been transferred.”
Hence invoice financing can be seen as the ultimate bad credit business loan.
Startup Loans
Use a startup loan to launch your new small business without giving up any equity—and establish your business credit score in the process.
Get up to $750,000 in 2 – 4 weeks. Loan terms go up to 25 years, with interest rates as low as 0 – 17%.
Minimum Credit Score Needed
Per Lendio, “All you need is a credit score of 680 or higher and possibly a little collateral.”
Hence bad credit will not work here.
Business Acquisition Loans
A business acquisition loan helps you get the funding you need to purchase an existing small business or franchise. Submit your business plan and financial projections.
Get up to $5 million in as little as 30 days. Loan terms are revolving or 10 – 15 years, with interest rates as low as 5.5%.
Minimum Credit Score Needed
A lender will look at both your business credit report and the personal credit reports of any partners with a minimum 20% ownership stake.
However, Lendio does not say exactly what your credit score needs to be. But for this amount of business financing, it is highly doubtful that Lendio would accept a bad credit history.
So advantages are that they have several options and relatively high amounts available. But disadvantages are that some max rates are rather high.
What Credit Score is needed for a Business Loan: Observations
Getting funding based on personal credit can be tough, particularly if you have bad credit. Here are some pros and cons.
The lowest personal credit score (FICO) needed is 560 for a business line of credit from Lendio.
The most funding you can get is $15 million for an SBA loan from Lending Club.
But the shortest time in business required is one year at OnDeck for small business loans.
Alternatives
So borrowers with less than stellar personal credit might want to repair their credit. Or they could have another person with a good credit score act as a guarantor. Or they could offer collateral, which can take the shape of anything from equipment to a 401(k) account.
Any of those would open up more options. Online lenders would care less about a low FICO score if any of these factors were present.
What Credit Score is needed for a Business Loan: Takeaways
As with all funding sources, make sure to read the fine print. Your own unique needs are most important when deciding where to get business funding. Today, we want to hear from our audience! Share your voice with us about your experiences of what is the best credit score for business loan success.
