Launching a new business often requires outside funding. For many entrepreneurs, a start-up loan is the fuel that helps turn an idea into a functioning business. When lenders review start-up loan applications, one of the most important factors they consider is credit score.
So, how exactly does your credit score affect your chances of getting approved for a start-up business loan?
What Is Considered “Good Credit” for a Start-Up Loan?
Credit scores help lenders measure risk. The stronger your credit profile, the more financing options and better loan terms you are likely to receive.
In general:
1. Good personal credit score: 720 or higher
2. Good business credit score: 80 or higher
It’s important to understand that business credit scoring models vary depending on the bureau and lender. However, guidance from the U.S. Federal Reserve Small Business Credit Survey provides a helpful industry benchmark:
Credit Risk Categories
Low credit risk:
1. Business credit score: 80–100
2. Personal credit score: 720+
Medium credit risk:
1. Business credit score: 50–79
2. Personal credit score: 620–719
High credit risk:
1. Business credit score: 1–49
2. Personal credit score: Below 620
Borrowers in the low-risk category generally qualify for higher loan amounts, lower interest rates, and longer repayment terms. High-risk borrowers often face limited options, higher costs, or outright denial.
Can You Get a Start-Up Loan with a 600 Credit Score?
Many entrepreneurs ask whether a start-up loan is possible with a credit score below 700, or even around 600. While approval isn’t impossible, it becomes significantly more challenging. If funding is not urgent, improving your credit score before applying is often the smartest long-term strategy. Raising your score can move you out of the high-risk category, unlocking better loan options and saving you money over time.
Which Credit Score Matters More: Personal or Business?
For most start-up loans, lenders evaluate both personal and business credit. However, personal credit usually carries more weight—especially for newer businesses with limited operating history.
Key differences to understand:
1. Personal credit scores (such as FICO) reflect individual borrowing behavior
2. Business credit scores are tracked separately by bureaus like Dun & Bradstreet
3. Some bureaus, such as Experian, report both personal and business credit
Because start-ups often lack extensive financial records, lenders rely heavily on the owner’s personal credit profile to assess risk.
What If Your Credit Score Is Low?
A low credit score doesn’t just increase the chances of loan denial—it can also result in:
1. Smaller loan approvals
2. Higher interest rates and fees
3. Shorter repayment terms
These factors can limit cash flow and make early business growth more difficult.
How Unsecured Finances Can Help
At Unsecured Finances, we specialize in helping business owners understand their funding options and improve how they present themselves to lenders. We offer honest guidance based on your credit profile and help you identify the most realistic paths to financing.
Our goal is to position you for the best funding opportunities available, whether that means applying now or taking strategic steps to strengthen your credit first. Call us today to speak with an experienced funding specialist and start building a clear path toward business financing.
Thinking of Starting a New Business?
Now is the perfect time to take action. As new opportunities emerge, entrepreneurs are finding innovative ways to build and grow businesses. If funding has been holding you back, there are solutions available. With good credit and the right guidance, Small Business Loans and No-Doc Loans may be within reach. We’re here to provide the education, strategy, and support needed to help make your vision a reality.
Unsecured Finances has over 10 years of experience in business funding and consulting. We specialize in helping entrepreneurs secure:
1. Unsecured Business Loans
2. Start-Up Business Specialty Loans
3. Unsecured No-Documentation (No-Doc Stated Income) Loans
4. Business Lines of Credit from $10,000 to $500,000
5. Funding solutions that do not require assets
Apply on our website to find out if you qualify, or call today for a free consultation: 1-888-294-2584
