The minimum credit score required for an SBA loan depends on the type of loan. For SBA Microloans, the minimum credit score is typically between 620-640. For SBA 7(a) loans, the minimum credit score is typically 640, but borrowers may find greater success if they can boost their credit score into the 680+ range.

When applying for an SBA loan, the lender will evaluate your creditworthiness based on a number of factors:

• You must be able to show that you can pay your business expenses, a draw for yourself and the loan payment the income generated by the business. The lender will ask to see sales records for prior years and cash flow projections.
• If you are operating a start-up, the lender will have questions about your prior business experience and education to determine that you have the know-how to successfully operate the type of business you wish to start.
• Business owners need to invest a significant amount of money in their own company before they can seek outside funding. For a startup, the lender will want to see a minimum of $1 of the owner’s money invested in the business for $3 of loan funding. For an established business, the lender is looking for a maximum of $4 of debt to $1 of net worth for the business.
• The lender will check your personal and business credit histories. You are more likely to be approved if your credit report shows that you have a history of meeting your credit obligations as agreed. If there are any blemishes on your credit reports, be prepared to explain them to the lender in detail.
• A good credit score - preferably above 680.
• A history free from recent bankruptcies, foreclosures, or tax liens.
• Having been in business for at least two years.
• The ability to provide collateral for loan requests over $25,000.
• The ability to make a down payment of 10% if your intended use of funds is to purchase a business, commercial real estate, or business-related equipment.
• Sufficient cash flow to meet your debt obligations.
• Sufficient working capital (once you subtract liabilities from assets).
• “Good character” according to the SBA (partially decided based on your track record of managing your resources and day-to-day business affairs).

The SBA Express loan is a great option for business owners who have been denied commercial loans due to their perceived risk. The Small Business Administration (SBA) guarantee to third-party lenders ensures a higher approval rate, and the turnaround time after applying is much faster than other forms of financing. Additionally, SBA loans typically range from $500 to $5.5 million, and can be used for most business purposes, including operating capital and long-term fixed assets. There are also a variety of loan products under the SBA umbrella to choose from, so no matter what the need is, there is likely an SBA guaranteed product that will benefit your business.

For more information, please visit www.sbaexpress.loans/sba-express and www.sbaexpress.loans/blog/what-is-an-sba-loan.

SBA loan disadvantages include:

• Lengthy approval times (for standard SBA 7(a) loans)
• Lots of documentation
• Collateral is often required
• Certain businesses, including real estate investing, lending, gambling, and speculation are prohibited
• High credit scores are typically required (typically 680+)
• May be restrictions on supplemental/additional financing
• They may be difficult to get if you don't have a strong credit history, though this is not a hard requirement.
• Significant paperwork is required by the SBA.
• They cannot be used for investment properties.

The Small Business Administration (SBA) guarantees many different types of loans to meet the unique needs of most small business owners. The most widely used loan is the SBA 7(a) loan, but there are other options available. The other types of SBA loans include:

• SBA 504 Loan Program
• SBA Microloan Program
• SBA Disaster Loan Program
• SBA Express Loan Program
• SBA Export Loan Program
• SBA CAP Lines Program