Does a 670 Credit Score Qualify for a Small Business Loan?

In today’s fast-paced entrepreneurial landscape, securing funding is often the make-or-break factor for small business success. One of the most common questions aspiring business owners ask is: "Does a 670 credit score qualify me for a small business loan?" The answer isn’t a simple yes or no—it depends on multiple factors, including lender requirements, loan type, and economic conditions.

Understanding Credit Scores and Small Business Loans

A credit score of 670 falls within the "fair" range (typically 580–669 is considered fair, while 670–739 is good by FICO standards). While it’s not excellent, it’s also not terrible. Many lenders will consider applicants with a 670 score, but the terms may not be as favorable as they would be for someone with a higher score.

How Lenders View a 670 Credit Score

Traditional banks and credit unions often prefer borrowers with scores above 680 or 700, but alternative lenders, online lenders, and some SBA (Small Business Administration) loan programs may accept scores as low as 620–650. Here’s how different lenders might react to a 670 score:

• Banks: May approve but could require strong collateral or a co-signer.
• Online Lenders: More lenient, but interest rates may be higher.
• SBA Loans: Possible approval, especially for SBA 7(a) loans, but stricter requirements apply.
• Microlenders & Nonprofits: Often work with lower credit scores but offer smaller loan amounts.

The Impact of Today’s Economic Climate

With inflation, rising interest rates, and economic uncertainty, lenders have become more cautious. A 670 credit score might have been sufficient a few years ago, but today, some lenders are tightening their criteria.

Key Factors Beyond Credit Score

While your credit score is important, lenders also evaluate:

1. Business Revenue & Cash Flow – Can your business repay the loan?
2. Time in Business – Startups face more scrutiny than established businesses.
3. Debt-to-Income Ratio (DTI) – A high DTI could hurt approval chances.
4. Collateral – Secured loans are easier to get with fair credit.
5. Industry Risk – Some sectors (like restaurants) are seen as higher risk.

Loan Options for a 670 Credit Score

If your score is 670, here are some loan types you might qualify for:

1. SBA Loans

• SBA 7(a) Loan: Requires a minimum score of around 640–680, but strong business financials can compensate.
• SBA Microloan: For smaller amounts (up to $50,000), credit requirements are more flexible.

2. Online Business Loans

• Companies like Kabbage, OnDeck, or Fundbox specialize in fair-credit borrowers but charge higher APRs.

3. Business Lines of Credit

• Revolving credit can be easier to secure than term loans with a 670 score.

4. Invoice Financing or Merchant Cash Advances

• These are options if you need quick cash but come with high fees.

5. Credit Union or Community Bank Loans

• Smaller institutions may offer better terms for local businesses.

How to Improve Your Chances of Approval

If you’re set on applying with a 670 credit score, here’s how to strengthen your application:

Boost Your Credit Score Before Applying

• Pay down existing debt.
• Correct errors on your credit report.
• Avoid new credit inquiries before applying.

Prepare a Strong Business Plan

Lenders want to see that your business is viable. Include:
- Financial projections.
- Market analysis.
- A clear repayment strategy.

Consider a Co-Signer or Collateral

If your credit is borderline, adding a co-signer with strong credit or offering collateral (like equipment or real estate) can help.

Shop Around for the Best Lender

Don’t settle for the first offer—compare rates and terms from multiple lenders.

The Bottom Line

A 670 credit score doesn’t disqualify you from getting a small business loan, but it does limit your options. By understanding lender expectations, improving your financial profile, and exploring alternative funding sources, you can still secure the capital you need to grow your business.

The key is to be strategic—know where to apply, what to prepare, and how to negotiate the best possible terms. In today’s competitive market, every point on your credit score and every detail in your application matters.