Frequently Asked Questions About The Importance Of Having Good Credit

Updated: Feb 24

To further drive the point of how important having a good credit score is, I’m sharing with you some common questions business owners have regarding credit.

Can you start a business with bad credit?

While you can start a business with bad credit, you will have a tough time growing your business. And a business that does not grow is a business that won’t succeed in the long run.

And while there are many loan options for business owners with bad credit, I definitely do not recommend you getting any of those. With a loan for bad credit, you will end up paying way more than what you got, which will hurt your finances instead of helping them.

What credit score is needed for a small business loan?

It all depends on what financial institution you would like to apply with, but, usually, they expect you to have a score of around 630 or up for a small business loan.

Can I get an SBA loan with bad credit?

The short answer is no.

The SBA doesn’t lend money directly, they do it through approved lenders (most commonly banks). And while each lender will have a different credit score minimum—which also varies depending on the SBA program you’re applying for—, they usually don’t approve businesses that have a credit score below 680.

Can I get a loan if I don’t have a credit history?

Usually, banks and financial institutions don’t lend to business owners that do not have a credit score. That why many think not having a credit score and having a negative credit score are the same (hint: they’re not the same thing).

Why do they not lend business owners without a credit score?

Well, financial institutions see people with no credit score as a gamble: either they are great at repaying and keep