Personal Credit
Personal Credit
Your credit score should be at least 740 to rate as a strong candidate for a SBA loan. That being said, if you are above 700 you will still be a good candidate for a SBA loan in most cases.
If you are below 700, then you need to figure out why.
For Example
I worked with a client who had a FICO score of 680. Upon further investigation, they had recently changed medical providers and there were several small bills (less than $500 total) that had been sent to collections. They were in the process of trying to remedy each of them. All other personal debt (mortgage, auto, credit cards) had perfect payment history and was current. This was not a problem and the client obtained $750,000 to purchase a business. On the other side of that, I have seen a 675 credit score that looked very different. They had several collections and a charge-off from two years back, plus one 30-day late payment on a mortgage the previous month. The history of credit issues was a red flag (even though these were seemingly minor) and they were not able to obtain financing
The absolute minimum credit score for most banks when it comes to financing the purchase of a business is 650, but the probability is very low. If this is where your score sits I would highly recommend repairs before trying to borrow money to buy a large business.
The higher your credit score the better and so anything you can do to improve it will help you – especially to get over 700.
