Can I get a business loan with a 600 credit score?

Credit scores can be a source of stress for company owners looking to gain business finance. But with 9 in 10 business owners not knowing what goes into a company credit score, and 6.5 in 10 never having checked their company credit score, we believe the facts can help alleviate some of this stress.

👉 Find out how to transform bad credit in time for a new loan 

Can I get a business loan with a 600 credit score?

As with anything, when it comes to business finance, the answer is maybe – it depends on you, the loan you’re applying for, and the lender. At Funding Options by Tide, we may be able to help you attain funding. Simply head to our quote page and input your information to find out if we can help you find a suitable business loan.

In the meantime, some considerations for companies with a credit score of 600 when looking for business loans include:

• Certainty: Are you sure business funding is what you’re after? Consider why you’re seeking funding and if there are further avenues you might like to consider. For instance, if you have a very short trading history (ie you’re a new limited company) which has resulted in a lower credit score and you’d like to apply for a revolving credit facility which you intend to repay each month to get your score up, then funding might be a suitable idea. If, however, you have taken out a lot of debt recently and are struggling to manage that debt, and you’re hoping to take out further business finance, it might be wise to sit down with your financial advisor and consider your options.

• Alternatives: Have you tried to secure funding in the form of an investment funding or have you considered leveraging a P2P lending platform? There are alternatives to business loans that you might want to consider.  

• Lender types: Lenders come in all shapes and sizes. There’s the type we all know, banks, but there are also online and alternative lenders, many of whom have different eligibility guidelines. Consider the different types of lenders to find the most suitable one for your business if your score is below 600.

• Additional evidence: Do you have any additional evidence you can present to a lender to help demonstrate your ability to repay the loan? For instance, can you put together some cash flow projections, do you have any new client contracts that will substantially increase income in the coming months, or do you have a solid exit plan backed by industry experience or data?

• Interest rates and availability: If your score is 600 or lower, it’s possible you may be faced with higher interest rates or a reduced availability of loans.

• Increasing your score: You might want to consider improving your company and personal credit scores. This can help you gain access to a greater range of more favourable options in future.

👉 Want a business loan? Get a quote here.

What goes into a company credit score?

Credit agencies take a number of factors into consideration when evaluating your creditworthiness, including:

• Your history with debt: Has your company ever missed a payment? Have you ever defaulted on a loan? Do you pay your bills and invoices in a timely manner? The credit companies take your track record into consideration.

• Credit utilisation: Similarly to personal credit scores, how much of your available credit you utilise has an impact on your score.

• Available credit: How much credit lenders have extended to your business has an impact. As a general rule of thumb, the more credit lenders have extended the better your score. This is because lenders see other lenders trusting you as a positive sign.

• Hard searches: If you’re regularly applying for new loans, this can add a lot of hard searches to your company record, which can have a negative impact on your score.

• Company information: Your trading history as a business, including your age and information on your directors, has an impact.

• Companies house records: Submitting your annual accounts on time and accurately may have a positive impact on your score.

👉 Click here to find out about bad credit business loans. 

Does my personal credit score make a difference when applying for business finance?

Maybe. Here’s why:

• Company credit score: The personal credit scores of company directors can play a role in the company credit score.

• Personal guarantee: Many lenders ask for personal guarantees from the company director.

• Sole traders: If you’re applying for a sole trader loan or if you are self-employed, your personal credit score may be used to determine how likely you are to repay the loan.

👉 Find out how to get a loan as a new limited company. 

Find a business loan with Funding Options by Tide

We help match eligible borrowers to our network of 120+ lenders offering between £1,000 and £20M. If you’re worried about your credit score (personal or business) having an impact on your ability to gain funding, just click the link below and submit your information to find out if our team of experts can help you find and apply for a suitable loan.

Find a business loan.

Please note that the information above is not intended to be financial advice. You should seek independent financial advice before making any decisions about your financial future.

It’s important to remember that all loans and credit agreements come with risks. These risks include non-payment and late-payment of the agreed repayment plan, which could affect your business credit score and impact your ability to find future funding. Always read the terms and conditions of every loan or credit agreement before you proceed. Contact us for support if you ever face difficulties making your repayments.

Funding Options, now part of Tide, helps UK firms access business finance, working directly with businesses and their trusted advisors. Funding Options are a credit broker and do not provide loans directly. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. Funding Options can introduce applicants to a number of providers based on the applicants' circumstances and creditworthiness. Funding Options will receive a commission or finder’s fee for effecting such finance introductions.