Questions owners actually ask
What credit score do you actually need for business funding?
Lower than most owners think for revenue-based products, and higher than they hope for a bank. What the score really controls is price, not the answer.
There is no single number, because different products care about it differently. Rough working ranges:
| Product | Typical credit floor |
|---|---|
| Merchant cash advance | Around 500, sometimes lower |
| Revenue-based financing | Around 525 to 550 |
| Working capital | Around 550 to 600 |
| Invoice factoring | Your customers' credit matters more than yours |
| Business line of credit | Around 600 to 660 |
| Equipment financing | Around 600, and the equipment secures it |
| Bank term loan | 680 and up, usually well up |
What the score is actually doing
On revenue-based products the score is not the gate. Deposits are. The score is a pricing input and a risk flag: it moves your factor rate or your term, and it can knock you out if it is very low and the statements are weak. Strong deposits with a 540 beats thin deposits with a 700 at most revenue-based funders, and that surprises people every time.
It works the other way at a bank. There, the score is a gate, and no amount of revenue gets you past a 600.
What hurts more than the number
Underwriters look past the score at specific items, and these matter more than the three digits:
- Recent bankruptcy. Usually a hard stop until it is discharged, and often for a period after.
- Open tax liens or judgments. Not automatically fatal, but they need explaining and sometimes a payment plan on record.
- A prior default on business funding. The most damaging item there is, because it is exactly the behaviour being underwritten.
- Very recent delinquencies. Something 30 days late last month reads worse than a charge-off from four years ago.
If your score is low
Work on the thing that actually moves the offer. Sixty days of clean banking with no overdrafts will change your terms faster than sixty days of credit repair will. Run all revenue through one business account, stop the NSFs, and let the statements do the arguing. Then read what is realistic with damaged credit.
Questions owners ask
Is it my personal or business credit?
Personal, on almost every file under a few hundred thousand dollars. Business credit exists but is thin for most independent businesses and rarely decides anything at this size.
Will applying hurt my score?
Most revenue-based funders start with a soft pull. A hard pull usually comes only at offer stage. See our page on whether applying hurts your credit.
Can I get funded with no credit history at all?
Sometimes, on revenue-based products, if deposits are strong and the business has real time in business. Expect worse pricing than a thin file deserves.
Related
- Will applying hurt my credit?
- What is a factor rate?
- What lenders see in your bank statements
- Funding with an existing MCA
- Why was I declined?
- How much can I borrow?
- How fast can I get funded?
- What documents do I need?
- Can they take my house?
- What is a UCC filing?
- Can I pay off an MCA early?
- What if I miss a payment?
- Under a year in business?
- What is a holdback rate?
- Tax lien or judgment?
- Is my industry restricted?
- What does a broker charge?
- Why 3 different offers?
- Do I need collateral?
- Will they call my customers?
All business funding options › · Calculators ›
General information, not financial or legal advice. Terms vary by lender and business.