Is a business loan based on personal credit?

Is a business loan based on personal credit?


Personal credit is often considered as a secondary factor when qualifying a business owner for business financing.

However the primary factors for qualification will be the health of your business; meaning, your average monthly revenue, and the length of time you’ve been able to sustain that will also be a consideration.

So, even if your personal credit score is perfect, but your business is 3 months old and generating $5,000 a month then it’s unlikely that you’ll get a business loan.

However, if you’re on the fence or barely eligible as a business owner then a  high personal credit score will play in your favour as an extra security blanket for the lender to know that you’re a responsible person when it comes to your credit history and that may help you get approved.

While business credit scores are key to a business’s success, they aren’t as well understood as personal credit scores. Learn the ins and outs of business credit.

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Vlad Sherbatov

Vlad is the President and Co-Founder of Smarter Loans, Canada's original and largest loan comparison website. He is a passionate entrepreneur and business leader in the Canadian financial sector. He was selected as a 2019 Top 25 Leaders in Lending by the Canadian Lenders Association. Vlad is an author at Smarter Loans, and has been featured in publications like the Toronto Star and National Post, among others.