What Credit Score Do I Need for Business Funding?

The credit score you need depends entirely on what type of funding you’re applying for. Here’s a straightforward breakdown.

Credit Score Minimums by Product

Funding Type	Minimum FICO	Sweet Spot
Merchant Cash Advance	500	550+
Revenue-Based Financing	550	600+
Equipment Financing	550	620+
Invoice Factoring	N/A (customer credit matters)	N/A
Business Line of Credit	600	650+
Term Loan (online lender)	600	650+
SBA Loan	680	700+
Bank Term Loan	680	720+

These are minimums, not guarantees. A 500 FICO with $50K/month in revenue is more fundable than a 600 FICO with $8K/month. Lenders look at the full picture.

What Lenders Actually Care About

For Revenue-Based Products (MCAs, Working Capital)

Your credit score is a secondary factor. What matters most:

1. Monthly bank deposits: Consistent revenue of $10K+ monthly
2. Time in business: 6+ months minimum
3. Bank balance health: No frequent overdrafts or NSF fees
4. Existing positions: How many active advances you’re currently repaying

A business owner with a 520 FICO and $40K/month in deposits will get better offers than someone with a 650 FICO and $12K/month.

For Traditional Products (SBA, Bank Loans, Lines of Credit)

Credit score matters much more here:

1. Personal credit score: Primary gating factor. Below 680, most banks won’t proceed.
2. Credit history length: Longer is better. Thin files are almost as bad as low scores.
3. Payment history: Recent late payments or collections are red flags.
4. Credit utilization: Maxed-out credit cards signal financial stress.
5. Business financials: Tax returns, P&L, balance sheet.

How Your Score Affects Cost

Higher credit scores get better rates. The difference is significant:

• 720+ FICO: Access to the best SBA rates (Prime + 2-3%), lowest factor rates on MCAs (1.15-1.25)
• 650-720: Mid-range pricing. SBA possible but competitive. MCA factor rates around 1.25-1.35.
• 550-650: Limited to MCAs, equipment financing, and some online lenders. Factor rates of 1.35-1.5.
• Below 550: MCAs only, highest factor rates (1.4-1.5+). Revenue must be strong to compensate.

Does Applying Hurt Your Score?

Most alternative lenders (MCAs, online lenders) do a soft pull during initial review, which does not affect your credit score. A hard pull happens only after you accept an offer and proceed with final approval.

SBA loans and bank loans typically require a hard pull upfront, which can drop your score by 5-10 points temporarily.

When you work with a funding company like Poseidon Financial Network, we do one soft pull and review your options across our funding programs. You get offers without multiple credit inquiries.

How to Check Your Score

Before applying, know where you stand:

• Credit Karma: Free, updated weekly. Uses VantageScore (not FICO, but close enough for estimation).
• Experian.com: Free FICO score. This is what most lenders use.
• Your bank: Many banks now show your FICO score in online banking.

If your score is borderline for the product you want, applying through a funding partner gives you the best chance. We know which programs are flexible on credit and which ones aren’t. One application, multiple options.