What credit score do you need for business funding?

Product matters more than lender

Revenue-based products — merchant cash advances, revenue-based financing — weight recent deposit history far more heavily than personal credit, which is why their published floors sit lowest. A line of credit or a term loan is underwritten closer to conventional credit, and the published floors rise accordingly. One lender in this directory publishes 550 for its merchant cash advance and 700 for its line of credit: same lender, same underwriting team, 150 points apart on product alone.

Which score, and why it is not the one you are looking at

"Credit score" is not one number. Different scoring models, built on different model versions, produce different results from the same file, and a lender picks whichever suits its product. The score in your banking app or a free monitoring service is frequently a different model, a different version, or a different bureau's data from the one pulled on your application.

Three consequences worth holding on to:

• A number you were shown last week is an indication, not what underwriting will see. Expect a spread.
• The bureaus hold different data. A tradeline reported to two of the three produces three different scores, and a lender that pulls one bureau may see the best of them or the worst.
• A published floor rarely says which model it applies to. Ask, if your number is close enough for it to matter.

Commercial scores are a separate system again, keyed to the business, running on their own scales and driven largely by what suppliers and lenders choose to report. A business can have a file it never created, assembled from public filings and trade data, and a business that has always paid cash can have no file at all. Forming an entity does not create one.

Most publish nothing

A majority of lenders in this directory publish no credit minimum at all. That is not a signal that they will take anyone. It means the number is not disclosed, and any site telling you what it is has estimated it.

What actually decides it

For revenue-based products, the practical gate is usually monthly deposit volume, how many days your balance went negative, and how many other advances are already taking a daily bite. A 680 score with three open advances is a harder file than a 560 with clean deposits.

Underneath those three, the detail that moves an offer up or down:

• Deposits that are genuinely revenue. Transfers between your own accounts, loan proceeds and owner contributions are all deposits and none of them is revenue. A funder that sized on gross deposits resizes once it reads the detail.
• Consistency rather than total. Twelve even months underwrite better than a spike and a trough that average to the same figure.
• Time in business, taken from the formation date on the state record rather than from what you typed on the form.
• Existing positions, which are visible in the statements whether or not you disclose them.

None of that is scored. All of it is read.

If you are under a published floor

The order matters, because two of these work in weeks and the rest work in months.

1. Stop the negative days. Fastest, and entirely within your control. Move the payroll run to the day after your largest receipt, hold a buffer sized to a week of debits, and turn off any automatic payment that lands on a thin day.
2. Pull all three consumer reports and read them. You are entitled to free copies through the federally mandated annual disclosure programme. Dispute anything inaccurate through the bureau's process, which the CFPB describes at consumerfinance.gov, and keep the correspondence.
3. Deal with revolving balances. Utilisation is one of the few inputs that responds quickly, and a personal card carrying the business is usually why it is high.
4. Clear the public record items you can. An unterminated UCC filing against an advance you repaid is not a score item, but commercial underwriters read it and it is removable — see what a UCC filing on your receivables is.
5. Then wait three months and reapply with clean statements. Three clean months is the shortest honest path from one tier to the next.

What clearing a floor is worth in dollars

Suppose you need $50,000. At the revenue-based tier a 1.35 factor delivers $67,500 across about nine months of weekly remittances of $1,730.77 — $17,500 of cost, an annualised rate near 83%.

A tier up, a 36-month amortising note at 13% has a payment of $1,684.70 a month and repays $60,649.20 — $10,649 of cost.

The dollar difference is about $6,850. The cash flow difference is larger: $1,730.77 a week against $1,684.70 a month. Three months spent fixing negative days and correcting a reporting error is, on those numbers, well-paid work.

Checking will not hurt you

A Level 1 inquiry here filters against published criteria and involves no credit pull of any kind. Nor does reading your own file: a consumer-initiated review of your own report is not treated as an application inquiry.

The pull that matters is the one a funder runs, and it requires your authorisation and a permissible purpose — which on a business application comes from the personal guarantee rather than from the business. That is worth knowing before you sign an authorisation drafted to cover an indefinite period and an unnamed list of affiliates.