Did you know you have a FICO small business credit score that banks use to help make their lending decisions?  The SBA uses this score to prescreen loans as well. As with your personal FICO credit score, the SBSS score can impact your chances of getting a business loan.

If FICO's Small Business Scoring Service (SBSS) is a foreign concept to you, you’re not alone. Lenders are not required to disclose that they use SBSS. 

The goal of SBSS score is to give customers an application risk score for the small to medium business owner. The score compares small business owners seeking new credit with those who sought new credit in the past.  Most people are familiar with either a FICO, TransUnion, Experian, D&B or Paydex score.  However, your credit profile changes up or down as you interact with your credit.  For example, if you have a 700 FICO score today and you go out and finance a car, your credit habits are going to change.

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What SBSS did was if a small business owner had a credit profile of “x” how did other credit profiles in the same group of “x” perform once they received new credit.   Based on various different scoring models that look at different lines of business and other data sources, SBSS can compare, on a sub population level, different credit profiles and how they performed in the past.

The SBSS score helps institutions better predict how a portfolio of loans will perform over time vs. a single bureau consumer score like FICO, for eample.

SBSS Scoring:

  • The scoring is based upon personal and business credit history and other financial information. A strong history of business credit with timely payments to vendors and suppliers may help boost your SBSS score.
  • SBSS scores can be used for credit amounts up to $1MM.
  • The score ranges from 0 to 300. Like personal credit scores, SBSS rank-orders applicants by their likelihood of making payments on time.
  • The minimum score to pass the SBA's pre-screen process is currently 140.
  • Because businesses are not covered by Fair Credit Reporting Act protections, you can be denied business financing due to your SBSS score, and lenders are not required to notify you of the reason why.

As lenders or others who need to quickly evaluate the health of a business continue to compete to make faster, more accurate lending decisions, credit scoring models like FICO's SBSS will only become more customary.

We tell our clients to obtain this score and to learn what influences it, so you can put yourself in the best possible position the next time you need access to capital.