What Credit Score Do I Need To Get A Business Loan?

Find out what credit score it’ll take to qualify for the business loan you’re looking for.

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, updated on September 4th, 2023       

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Business Loans Banner - Woman checking her business' credit score her laptop while sitting on the couch next to her dog

When searching for the right loan for your business, it’s important to understand how you’re presenting yourself to prospective lenders, namely in the form of your credit score. Find out more about the qualification requirements for business loans relating to your credit score in Savvy's informative guide.

What credit score will I need when applying for a business loan?

In many cases, lenders won’t have a minimum credit score set in stone when it comes to assessing applications. These will be considered on a case-by-case basis, analysing the current state of their finances first and foremost, assessing the revenue the business generates to determine how much it’s capable of borrowing. The circumstances surrounding their good or bad credit score and whether there’s been any improvement in recent months or years will also be looked at.

However, some will require businesses to have a score of at least 500 to proceed with the application. Restrictions like these are put in place by lenders who deem borrowers with low credit scores to be too great a risk to lend to. There are a variety of factors which can affect your business’ credit score. Data obtained from previous lenders, your bank, utility services and more are all included in the calculation. Some of the factors which may impact your score include:

  • The length of time you’ve been operating (the longer, the better)
  • The frequency of past credit enquiries (such as loan applications)
  • Prior defaults, bankruptcies or court judgments

At Savvy, we’re partnered with a range of flexible business lenders who can tailor their products to your needs. Not all of them will enforce a 500-credit score minimum, opening the door for small businesses who’ve struggled with their credit in the past and are on the way up to access the funding they need and improve their score in the process.

What other eligibility criteria will I need to meet?

Aside from sometimes having to meet credit score requirements, the other eligibility points you should ensure you meet include:

Personal credit history

In some cases, particularly if your business is relatively new, lenders will consider your personal credit score and history in conjunction with that of your business. They’ll want to see that you’ve demonstrated responsibility in the past of repaying debts promptly and in full, rather than having issues in doing so. Most lenders will also require applicants to have a clean history when it comes to bankruptcy.

Business trading requirements

In addition to personal qualification points, your business will likely need to have been trading for at least six months prior to your application. In some cases, lenders will enforce a minimum of at least 12 months’ worth of trading, so it’s important to check with your lender to ensure you meet their requirements.

Minimum monthly or annual turnover

Lenders will always implement a required minimum monthly revenue figure as part of their loan criteria. The lowest required turnover you’ll find on a business loan is $5,000. However, this will vary between lenders, with some asking for an annual turnover of up to $1 million. As such, it’s important to find a lender whose criteria you meet.

Top tips for improving your business credit score

Pay your bills on time

The simplest and most effective way to improve your business’ credit rating is to continue paying bills on time, whether that be for rent, utilities, supplies or other loan debts. In doing so, you’ll help your credit score grow over time and improve your chances of approval for future finance.

Reduce your available credit

If your business has credit cards which it uses, you can benefit from reducing their credit limits to cut down on your overall available credit. This will help your credit situation, particularly if you have cards which you don’t use and are actively hindering your score with their presence.

Check your report regularly

It’s important to keep an eye on your report regularly to ensure there aren’t any errors recorded which may affect your score in the long run. This allows you to nip them in the bud, as well as track the positive credit reporting stemming from paying your bills and potential suppliers.

Make sure your good credit behaviour is reported

There’s nothing worse than building up a strong history with a supplier or third party, only for your positive record to not be marked on your file. It’s useful for businesses, particularly in their early days, to seek out suppliers who record positive behaviour to help you build your profile.

Further frequently asked questions about business loans answered

Are unsecured business loans available for bad credit borrowers?

Yes – there are specialist lenders who can offer unsecured business loans to businesses with bad credit. These loans are likely to be much more restrictive in terms of the amount you can borrow, with ranges unlikely to exceed around $30,000, and come with substantially higher interest rates.

Are there any business loans with no credit check in Australia?

No – all lenders are required to conduct credit checks as part of their assessment of you and your business as potential borrowers. This is in line with Australian responsible lending laws, which prevent lenders from approving loans which they don’t believe you’re capable of repaying. They also use this to verify information such as your residential history and to ensure there aren’t any recent defaults which may be cause for concern. In terms of unsecured loans, there's no such thing as finance without a personal or business check.

Can startup businesses get approved without a credit score?

It’s possible, but not common – there are lenders operating in the market who can approve business loans for startups in certain circumstances without much of a credit score. These would rely heavily on the owners’ credit history and will typically require them to have successfully owned and operated business in the past, as well as have transferrable skills to help the running of the business.

What documents will I need to qualify for my loan?

The required documents for your business loan application include:

  • Personal ID (such as your driver’s licence or passport)
  • Your active ABN/ACN and GST registration
  • Business bank statements
  • Record of the cost of rent
  • Business financials for bigger loans of around $250,000 or more, including a business plan, tax returns, accounts receivable and payable and balance sheets
Are there any restrictions on how I can use my business loan?

Not really – as long as your business loan funds are being used for business purposes, you can spend them however you like. Whether you’re looking to add to your business’ overall cashflow, help cover staff salaries, expand your premises or buy expensive equipment, a business loan can help you achieve your financial goals.

How quickly can I get a business loan?

The business loan application and approval process can take as little as 24 hours from the point of submission and is entirely online. It won’t always be this fast, though, as different lenders have different processes when it comes to assessing loan applications and not every business will have an uncomplicated financial situation. To maximise the speed of approval, make sure you’re only applying for what you need and have all your documents ready in advance to submit.

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