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SBA Loans and Personal Credit Scores

Posted by Prudent Lenders in News with No Comments

SBA does not publish definitive thresholds for borrower credit scores. Prior personal bankruptcy does not cause a borrower to be ineligible to receive an SBA loan.

Experience shows, however, that personal credit scores of 650+ are, generally, approved by SBA. Personal credit scores between 600 and 650 usually necessitate a discussion of issues encountered while scores below 600 can be a reason which SBA cites when a request is denied. Typically language similar to “The ability of the borrower to adhere to the terms and conditions of the loan cannot be reasonably anticipated” is SBA code for the weak credit history’s impact on the loan request.

When a borrower’s credit score has been impacted by prior issues, SBA wants to see that the issue has been addressed formally and that the borrower has continued to make payments towards that resolution. SBA does not want to see that there are unresolved issues even if the credit score is moderate.

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