1. What type of credit score is needed for a business loan?
While you can probably get a business loan in the US with most FICO scores, in general you’ll need a score of at least 500 to qualify for a business loan from an online funder. The better your FICO score the more options for lower rates and funding solutions you’ll have. For example, someone with a FICO score of 600 would be eligible for approval with more funders, and receive better offers. The time in business is an important factor for funders as well. If you are able to show 3 years of financial statements you’ll have a good chance to get approved for a business loan. Ultimately, the minimum credit score that you need will be determined by the type of funder you apply with. Banks will require higher scores, while online or alternative funders might be more open to lower credit scores.
2. How long are business loans in the US?
Business loans in the US can be as short as 6 months – 10 years. The borrow amount will often be an important factor in determining the length of the loan. A large loan for purchase of land, or real-estate might be for 5+ years, while a smaller loan of up to $200,000 can be paid back over 2-3 years. Most business loans have a term of 6 – 60 months.
3. How do business loans help the economy grow?
Business loans often help businesses grow and expand. This can lead to hiring new employees, which would now benefit from having a job. This will help reduce unemployment, and also give the employed person buying ability. By being employed, they are able to contribute back to the economy by purchasing homes, cars, groceries, etc and helping other businesses that sell those goods and services.