There comes a time for every business where you will consider a loan. You may need the additional funds for an expansion, equipment, inventory, or even hiring new talent. If you see a small business loan in the future, you may wonder about your credit score's importance.

Just how important is your credit profile when applying for a loan? Follow our guide and learn more about how your credit profile plays a role.

What Credit Score is Needed for Small Business Loans?

There is no magic number for lenders to grant a small business loan. Instead, we use a variety of factors to determine if you qualify. But your credit score is critical when applying. Because small business owners exert much influence on their businesses, lenders often view owners and their companies as "one-and-the-same."

Because small business loans often hinge on their owner's credit report, a higher score will come with benefits. A good personal credit score for a small business loan gives you more options. Higher credit scores often grant better interest rates and approval chances.

Do You Need Good Credit for a Small Business Loan?

The answer to this question depends on what number you associate with the word 'good.' In terms of your FICO number, 670-740 is considered a 'good' score, but there are loans for every score granted every day.

Even though there are options for everyone, every extra bump in your credit score helps. We recommend pulling your free credit report to see where you stand. Do this from a source that won't pull your score with harmful inquiries. One option is freecreditreport.com, where you can obtain your FICO score without a drop in your credit. If you see anything on your credit report that is inaccurate or outdated, request removal to increase your score.

Every point helps, so we recommend waiting to apply for a loan if you think any issues relating to your credit score will improve over the next few months. How do you know which issues affect your credit? Here is a list of the five factors that assemble your FICO score and how much each is weighted:

• Credit Inquiries – 10%
• Debt Usage – 30%
• Payment History – 35%
• Credit Age – 15%
• Account Mix – 10%

Working With Falcon National Bank

Working with Falcon National Bank is the best choice if you need a small business loan. As an SBA Preferred Lender, we can help you take control of your business and make the best choice for your needs. Contact us to find the perfect solution for you when you need help securing the funds to grow your business.