The Small Business Credit Score You Never Hear About

The FICO® SBSS℠ is not widely spoken about, but it can make or break your chances of qualifying for a business loan. This very specific small business credit score is used to determine the worthiness of each business and business owner who applies for financing.

What is the FICO® SBSS℠ Credit Score?

The FICO® SBSS℠ Credit Score is used by the U.S. Small Business Administration and over 7,500 business lenders to assess the risk level associated with businesses applying for term loans and lines of credit up to 1 million dollars. The FICO® SBSS℠ Credit Score system is customizable and generates a faster score and as a result, many lenders, including the SBA, are using it as a tool to pre-screen and approve business loans.

How does the FICO® SBSS℠ Credit Score work?

The FICO® SBSS℠ Credit Score categorizes small businesses by the likelihood that they will make timely payments. It ranges from 0-300 with the higher credit score reflecting the lower risk. The score is based on the principal(s) FICO® personal credit score, information compiled by business credit bureaus and other commercial data (age of business, payment history, amount of employees, assets and revenue, etc.).

Personal Credit Scores are tabulated by using information gathered by the three major credit bureaus, Experian, Equifax, and TransUnion; whereas business credit scores are tabulated by using information compiled by business credit bureaus, including Dun & Bradstreet, Equifax, and Experian.  The FICO® SBSS℠ Credit Score system allows lenders to accrue a personalized score based on their own priorities. The lender may prefer a certain business credit bureau, in which case they can customize the generator to drive information from that bureau first. If the data is revealed to be limited, the generator will automatically pull from the next two business credit bureaus consecutively. The lender can also have the generator place a greater emphasis on a personal credit profile instead of other credit factors; that is, they can opt for the personal credit profile to be considered as the highest determining factor when generating a score.

How does it impact businesses?

The minimum FICO® SBSS℠ Credit Score threshold used for approvals by the SBA pre-screening is 140 to date, however, most lenders have adjusted their threshold of approvals to be between 160 – 180; This means that if a firm has any derogatory information or has minimal business credit, the principal(s) only chance of gaining a minimum FICO® SBSS℠ threshold of 140, would be to have exceptional personal credit.

According to the Finance Index represented by bQual, the majority of franchise brand owners such as Checkers, Jamba Juice, Lenny’s Sub Shop, etc. reveal an average FICO® score of 748.15, an average FICO® SBSS℠ Credit Score of 191.38 with average liquid assets of $158,760.  This would be the ideal candidate to thrive as a franchisee making them a more attractive candidate to a lender and a franchisor.

The impact of a poor to average FICO® SBSS℠ Credit Score can cost a business pricing on financing or a rejection on loan approval. Without this much needed financing, a business could fail or be forced to stay stagnant. Plain and simple; most lenders are using The FICO® SBSS℠ Credit Score to quickly determine if providing a loan to a business is worth-while. Lenders are not required to disclose that they use the FICO® SBSS℠ Credit Score generator and very few business owners have even heard of the FICO® SBSS℠ Credit Score. Until now, there have been nearly no resources available to explain how the score impacts a business’s ability to qualify for funding and as a result, business owners are left helpless and in the dark.

The truth is, the market is changing; new technology and a fast-paced work world have contributed to a more competitive market. Maintaining an up-to-date and reputable credit profile is crucial for a business to maintain itself; a derogatory mark, an average personal credit score or a limited business credit profile are all contributing factors that can result in a lender’s decision to deny funding.

What should companies do to ensure they have the highest FICO® SBSS℠ Credit Score to gain the best advantage for better pricing and approvals on financing? 

The first priority is to understand how credit and scores work. Paying on time is definitely a must, and paying bills early can actually help improve a business score/index. Updating multiple vendors and creditors on a business credit report can show that a firm is a better risk depending on credit history, the amount of debt, and whether the creditor reports to the business credit bureaus. A profile with poor payment histories, collection accounts or judgments may make the process more complicated and it can get very confusing. Most firms hire professionals to provide credit repair/education and the necessary support to help them reach their credit goals.

As a business owner, it is important to review your Dun & Bradstreet, Experian, and Equifax business credit scores along with your personal FICO ® Credit Score initially to make sure the information being reported is correct. If any of your business scores and indexes are below excellent, you may need to build more credit or improve your existing credit. Like personal credit, business credit is a great asset that should be monitored consistently. To review your personal credit scores, go to For personal credit a FICO® score of 740 and above is considered excellent. Once all reports are ordered feel free to reach out to us for questions and feedback on what can be done to place scores at a threshold that will deliver greater savings and success.