Most entrepreneurs at one point or another must search for funding to launch of grow their businesses. Startups, by nature, do not have a track record of generating revenue or profits. Nor do they have a history of repaying loans. However, individuals do.
This is why credit scores play such a critical role in small business finance. Before they will make a funding decision, lenders will assess the ability of the borrower to repay debt. With startup ventures, there is often little else to go on, other than the entrepreneur’s personal financial history. Thus, an individual’s credit score plays a major role in a bank underwriter’s decision to approve a small business financing request.