FAQs
SBA-qualified lenders usually set their own criteria when assessing your eligibility. Most lenders will require a minimum FICO score of 620 or higher for their SBA Loans.
What is the lowest credit score for a SBA loan? ›
The minimum credit score required for an SBA loan depends on the type of loan. For SBA Microloans, the minimum credit score is typically between 620-640. For SBA 7(a) loans, the minimum credit score is typically 640, but borrowers may find greater success if they can boost their credit score into the 680+ range.
Can you get an SBA loan with a 600 credit score? ›
While there's no official required SBA loan minimum credit score from the Small Business Administration, lenders will often set minimum credit score requirements for both personal and business. An SBSS of 140 to 160+ or a personal score of 620 to 640+ are commonly needed to qualify.
What disqualifies you from getting an SBA loan? ›
The most common reasons SBA loans are denied are poor credit, too much existing debt, or insufficient collateral. Other reasons include: Prior bankruptcy. Negative taxable income.
Are SBA loans hard to qualify for? ›
In general, eligibility is based on what a business does to receive its income, the character of its ownership, and where the business operates. Normally, businesses must meet SBA size standards, be able to repay, and have a sound business purpose. Even those with bad credit may qualify for startup funding.
What FICO score does SBA use? ›
The FICO SBSS score ranges between 0 to 300, with 300 being the highest score. A higher score indicates lower risk. SBA Small Loans require the lender to prescreen the application using a FICO SBSS score. The current minimum SBSS score for 7(a) Small Loans is 155.
Which SBA loan is easiest to get approved for? ›
SBA Express loans, part of the SBA's 7(a) loan program, offer the easiest application process and the fastest approval times among all SBA loans. These loans, with payoff periods as long as 25 years, are designed for purposes such as refinancing debt, buying equipment, or improving real estate.
Do SBA loans look at personal credit? ›
Are SBA loans based on personal credit? Your personal credit score is only one of several criteria that lenders use to evaluate your SBA loan application. Lenders will also consider your annual revenue, time in business, cash flow and collateral, among other factors.
What are the odds of getting a SBA loan? ›
Many statistics say that large banks approve SBA loans at rates as low as 20-30%, while smaller banks approve SBA loans at around 40% or less. All this to say: SBA loan approval rates hover at half or below all loan applications that are submitted.
What credit score does an LLC start with? ›
While LLCs can be started at any credit level, there will be some notable disadvantages for business owners who have bad credit. Here are a few examples: Money will be hard to come by. Having bad personal credit will generally make it more difficult to get a bank loan to start or expand your LLC.
Drawbacks of SBA Loans
Long approval times. SBA loans can take a long time to fund, up to two to three months. If you need a fast funding option, an online lender is worth considering. Possible down payment requirement.
What are the 5 SBA requirements of a small business? ›
In addition to meeting the numerical standards for small, your business must:
- Be a for-profit business of any legal structure.
- Be independently owned and operated.
- Not be nationally dominant in its field.
- Be physically located and operate in the U.S. or its territories.
Failing to meet a lender's eligibility requirements for a business loan can result in denial. All lenders have specific criteria related to credit scores, annual revenue, time in business and other factors. What to do: It's important to review the eligibility requirements of potential lenders before applying.
Is it hard to get an SBA loan for a new business? ›
Make sure your business is eligible
To qualify for an SBA loan, lenders typically like to see at least two years in business, strong annual revenue and a good credit score, which starts around 690. If your business is struggling, an SBA loan is probably out of the question.
How fast can you get approved for a SBA loan? ›
On average, most SBA loans take 30 to 90 days from applying to funding. 7(a) loan subtypes are backed directly by the SBA. The SBA's turnaround time is 2 to 10 business days, but approval from your chosen lender can take 30 to 60 days. Microloans are loans for smaller amounts of $50,000 or less.
Do people get denied for SBA loans? ›
Many businesses can't qualify for an SBA loan, but that doesn't mean there aren't other options available. Once you review why your application was rejected, you can choose to apply again or explore alternatives.
Can I get a start-up business loan with a 500 credit score? ›
Yes, startup loans tend to stay lenient in terms of credit requirements. For example, a lender may offer business loans with a minimum 600 personal credit score while accepting businesses with six months' experience. Some lenders do offer startup business loans for a 500 credit score.
Does SBA pull personal credit? ›
Credit scores are used by lenders to assess whether you are likely to repay your loan, based on your past history with using credit. For example, a lender will look at both your personal financial information and your business financial statements to evaluate your request for an SBA small business loan.
