Your personal credit score is often one of the main factors business lenders consider when you apply for a loan. While not as important as it might be with a personal loan, it can impact your rate, loan amounts, terms and even what types of financing your company can qualify for. And in some cases, your business credit score might come into play as well.
No, there’s no one minimum credit score for all business loans. But most business lenders have a minimum personal credit score requirement that you’ll have to meet to qualify for a loan. You can sometimes find out what a provider’s credit requirements are by visiting its website — especially if it’s an online lender. Otherwise, you might have to call or visit a branch to learn if you’re eligible.
Not necessarily, though some lenders also take a look at your business’s credit requirements. Often, lenders will consider both your personal and business credit scores together. It can help if you have a high business credit score, but your options aren’t necessarily limited if you don’t.
You can find out what your business credit score is by contacting one of the credit bureaus like Equifax Canada or TransUnion Canada.
Likely, yes. Most lenders consider the credit scores of all partners who own a significant percentage of the business. Often, you’ll all need to meet the minimum credit requirement to qualify.
Lenders generally consider a credit score of 680 or higher to be good credit. But the higher your credit score is, the more options you have. A higher score also means you’ll be eligible for more competitive rates.
Larger loan amounts might also have higher credit requirements. If you’re interested in borrowing close to the maximum a lender offers, reach out to make sure your credit history is strong enough to qualify.
The types of business loans available to you might vary depending on your credit score, though there’s no one specific cutoff — it varies by lender.
Most if not all options are on the table if you have a high credit score. This includes financing through banks and the Canada Small Business Financing Program (CSBFP), which tend to have higher credit requirements than other types of lenders. Term loans, lines of credit, and equipment or vehicle financing tend to offer the most competitive deals, especially if they’re from a bank or online lender.
With fair credit, your choices are slightly more narrow. You likely won’t meet the cutoff for a CSBFP loan — most lenders require a score of 660 or higher. And you could struggle to qualify with a bank or some of the more selective online lenders. You can strengthen your chances of approval by backing your loan with business or personal assets.
When your credit score drops below 580, the main options available are financing that’s backed by some kind of collateral, like equipment, vehicle or invoice financing. Your other main choice is an advance on your business’s future profits, like factoring or a merchant cash advance. These last two options often don’t have any credit requirements at all. But they can cost the equivalent of a triple-digit APR — similar to a payday loan.
Business loans you could get with bad credit
| Response | Saskatchewan | Prince Edward Island | Ontario | Nova Scotia | Newfoundland and Labrador | New Brunswick | Manitoba | British Columbia | Alberta |
|---|---|---|---|---|---|---|---|---|---|
| Less than 3 months ago | 36.59% | 33.33% | 36.29% | 34.15% | 30% | 30% | 29.27% | 30.05% | 40.85% |
| 3 to 6 months ago | 9.76% | 10.26% | 19.51% | 15% | 15% | 9.76% | 11.48% | 8.45% | |
| 12 to 18 months ago | 7.32% | 16.67% | 3.35% | 2.44% | 10% | 2.44% | 2.73% | 2.11% | |
| 6 to 12 months ago | 2.44% | 16.67% | 6.11% | 7.32% | 15% | 5% | 7.32% | 7.65% | 4.23% |
| I've never checked my credit score | 2.44% | 1.18% | 1.09% | 2.11% | |||||
| 18 to 24 months ago | 1.58% | 2.44% | 2.44% | 3.83% | 2.11% | ||||
| 2 to 5 years ago | 1.38% | 5% | 1.09% | 0.7% | |||||
| More than 5 years ago | 0.99% | 1.09% | 1.41% |
Although your credit score is important for your business loan application, it isn’t the only factor lenders consider. Here are a few other details they’ll look at:
Business loan requirements explained
While there’s no set minimum credit score for a business loan, your options might be limited depending on your personal credit score. And while your business credit score may not necessarily factor in, your business partners’ personal credit ratings typically will. Find out more informationand compare financing options for your company with our guide to business loans.
If you’re looking for alternatives to Clearco, here are 7 types of business financing to help grow your operations or get your company off the ground.
Too busy to look for lenders on your own? Consider a business loan marketplace and get connected with multiple offers.
Compare $20,000 small business loans in Canada. Apply online and get your funds in 1 to 3 days.
How to get a small business emergency loan in Canada, including eligibility criteria and how to apply.
Compare business financing options for quick cashflow fixes.
Read through this helpful guide to learn the 8 common expenses to consider when budgeting for your startup.
Get the money you need to grow your business with a small business loan from this major Canadian bank.
Find out how you can qualify for financing to supplement your cash flow or purchase new assets for your business with this reputable bank.
Your guide to restaurant financing in Canada, including options for bad credit.
Learn how secured business loans work, including eligibility criteria and pros and cons.