The Small Business Scoring Service (SBSS) from FICO is the main business credit score used by the Small Business Administration (SBA) for SBA business loan applications. Non-SBA lenders might also use the SBSS score in addition to reports from Dun & Bradstreet, Equifax, Experian, and other credit bureaus as a way to determine how creditworthy a company is.
A low SBSS score under 140 tells lenders your business is risky to lend to, making it harder for you to get approved without extra collateral or offering a personal guarantee. Companies applying for SBA 7(a) small business loans (under $350K) must have an SBSS score above 165. Other SBA loan programs don’t have specific minimums and use the SBSS as part of the lender’s full credit analysis of the borrower’s business.
Small business lenders get SBSS scores and other data on small businesses through the FICO® LiquidCredit® Service infrastructure. The SBSS rates a small business’s credit risk on a 0–300 scale with these four risk levels:
| SBSS Score Range | Risk Level |
| 0–140 | High risk |
| 141–164 | Moderate risk |
| 165–229 | Low risk |
| 230–300 | Very low risk |
Although you can’t get the SBSS score for your company directly from FICO like you can from Dun & Bradstreet, Experian, and other business credit agencies, you can get a good estimate of what your SBSS will be by getting copies of your business credit reports and personal credit files. This is because the SBSS combines personal and business data to create your SBSS score. If all reports show you as low risk, you’ll likely fall into the “low risk” or “very low risk” levels for SBSS.
If you’re thinking about an SBA loan or your lender uses the SBSS as part of their underwriting process, here’s what FICO uses to calculate your SBSS score and what you can do to improve it.
Items That Impact Your SBSS Score
The SBSS score combines personal and business data from these 4 sources to determine your score:
- Personal credit scores and credit reports from Experian, Equifax, and Transunion.
- Business credit reports from Dun & Bradstreet, Experian, and other business ratings agencies.
- Loan application data, including stats like size, years in business, NAICS codes, customer commitments, and other information that demonstrates your ability to make payments.
- Financial statements including 2 to 3+ years of balance sheets, income statements, and cash flow statements.
Anyone that owns 20% or more of a small business gets their own unique score because of how personal credit impacts the risk level. This means a business partner with terrible personal credit could hurt your chances of getting a loan.
SBSS lets lenders change the weighting for these factors, like making one business credit report worth more than another, because they may trust that bureau’s score more. Talk to multiple lenders before applying to find one that puts more importance on your preferred credit bureau (i.e., the bureau where your score looks the strongest).
Don’t worry if you have struggled for a few years to get your business on solid financial footing. There are still things you can do to improve your business credit score, including the following:
- Use trade credit for working capital needs and ask your vendors to report your regular payments to the credit bureaus.
- Correct errors in your business data with the credit agencies. These could be years in business, number of employees, NAICS code, and more.
- Check your personal credit report for free with the 3 consumer agencies and fix errors directly with the agencies.
- Search public records and fix any errors in liens or UCC filings for your business. The Secretary of State’s website in the state where your business is registered should have online UCC search portals like this one for Kansas. Also, check the county clerk’s office if you own real estate, as well as the state’s court record system if you have been involved in litigation.
The FICO SBSS score is one of many business credit scores that show how risky your company is to lend to. Unlike other business credit rating agencies, FICO also uses personal credit as part of the SBSS score, so this is one of the ways personal credit can impact a business loan application. If your scores aren’t where they need to be, start working to improve your personal and business credit scores now, as they’ll take anywhere from a few months to a couple of years to climb. Interested to see what you qualify for today? SBL helps match small business owners in a wide range of credit scores with financing options that work for them. Click here to unlock your matches today.
SmallBusinessLoans does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only. You should consult your own tax, legal and accounting advisors.
