Do I need a business credit score?<\/h4>
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.<\/p>
You can find out what your business credit score is by contacting one of the credit bureaus like Equifax Canada or TransUnion Canada.<\/p> 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.<\/p><\/div><\/article> 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.<\/p> 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.<\/p> The types of business loans available to you might vary depending on your credit score, though there’s no one specific cutoff \u2014 it varies by lender.<\/p> 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)<\/a>, 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.<\/p> With fair credit, your choices are slightly more narrow. You likely won’t meet the cutoff for a CSBFP loan \u2014 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<\/a> with business or personal assets.<\/p> When your credit score drops below 580, the main options available are financing that’s backed by some kind of collateral, like equipment,<\/a> vehicle<\/a> or invoice financing. Your other main choice is an advance on your business’s future profits, like factoring<\/a> or a merchant cash advance<\/a>. These last two options often don’t have any credit requirements at all. But they can cost the equivalent of a triple-digit APR \u2014 similar to a payday loan.<\/p>I have business partners. Do their credit scores count, too?<\/h4>
What’s a good credit score for a business loan?<\/h3>
What are my options based on my credit score?<\/h3>
Good to excellent credit: 680 to 800<\/h4>
Fair credit: 580 to 679<\/h4>
Poor credit: 300 to 579<\/h4>