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SBA is an American Small Business Administration agency of the United States government. They offer support to small businesses and entrepreneurs. The motto of this company is “to maintain and strengthen the nation’s economy.” The Administration achieves this by enabling the viability of entrepreneurs and small businesses. SBA loans can be made through credit unions, banks, and other lenders who have a partnership with the SBA.
The SBA loans were given an enhancement and can now give up to a 90 percent guarantee to strengthen the capital access for entreprenerds and small businesses. Also, the Administration helps lead the federal government’s efforts to deliver 23 percent of a federal contract to new companies. Other Small business contracting programs consist of measures for ensuring specific federal contracts.
The Credit Bureau SBA Pulls From
Whether you are an entrepreneur, small, or a new business, SBA is always there to have your back and provide you with capital support, contracts, and loans. SBA does this with the only goal in focus to strengthen the nation’s economy, and you are one of those who can do that for your country.
To achieve that, you might require a certain amount of capital from the SBA when SBA considers if they can give out that loan to you. They will pull a Credit Report; this can be the credit report of a critical person of the company or even of the business itself.
The SBA will pull this credit report from ‘FICO Small Business Scoring Service.’
Depending upon what type of loan you apply for, the credit bureau might change. The Administration can take the help of FICO’s Scoring Service to get details on your credit history or the whole credit report itself. To learn more about the eligible credit score for receiving an SBA loan, continue reading this article.
Eligible Business Credit Score
If you are a small business, you might already know about FICO’s Small Business Scoring Service and doing your best to maintain a good score, but you might be wondering what scores can get through the SBA checks
The score of FICO’s scoring service can be anything between 0 and 300, depending upon the number of loans you have taken for the business and if you paid them timely or not. If you have a score of 155 or higher, your business can apply for a loan at the SBA.
Individual Credit Score
While applying for a loan as an entrepreneur, the SBA can help other credit bureaus get your credit report. Even if you are applying for a business loan, not only will a business credit report be pulled, but also the SBA may decide to get credit reports from the key persons of the company.
For Instance, if you, as a CEO of the company, are applying for a loan at the SBA. Likely, the SBA will also pull your credit report and score. SBA can ask for a credit report from other bureaus.
However, a bureau from where the SBA will get the report is not revealed by them, but with the help of research, it can be said that SBA will pull from either Experian, Equifax, or TransUnion. Experian is the one SBA mostly pulls from if you try to get deeper into this.
Minimum Credit Scores
If you are applying for a loan at the SBA as an entrepreneur, the SBA will likely get the report from Experian, and the SBA does not state a minimum score for an individual loan. This can be because, whenever you apply for a loan, the report does not always go to the same lender. So, every lender’s decision can vary, and the lender might also offer some flexibility.
As an entrepreneur, it is recommended that you consistently pay your loans back on time and only apply for a loan when required. Taking more loans and not paying them back on time can lead to a lower credit score, and it will become unlikely for you to get a loan from the SBA.
Disaster Loans at SBA
If your business faces a loss in ways like damages to your office or business building, etc., the reason is a disaster. The chances to get a loan from the SBA gradually increases
The SBA has a program called SBA Disaster Loans, which can help small businesses face disaster losses. However, you can only be eligible to apply for this loan if you have a small business that resides in a government-declared disaster area. If your business falls under this criterion, you can apply for an Economic Injury Disaster loan or EIDL.
The report for these loans can also be pulled from FICO’s scoring service, and individual reports are probably from Equifax or other bureaus.
Conclusion
The SBA has no fixed credit bureau from where they can pull an individual report, which can vary by lender. However, the SBA pulls the maximum number of individual reports from Equifax and can pull credit reports from a small business from FICO Small Business Scoring Service. You should always make sure that you have a high credit score. This ensures you get some capital from the SBA, which can help your business in many ways.
Frequently Asked Questions
Q1 Is there a chance for my business to qualify if it comes under the disaster criterion and has a low credit score?
Having a low credit score is always a disadvantage and can decrease the chance for you to get a loan. However, the lender might still decide to give you the loan if you fall under the disaster criterion.
Q2 Does SBA give personal loans?
No, SBA does not give personal loans.
