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Availing a business loan has now become common among Startups, traders, retailers, and manufacturers. A business loan can be used to meet working capital requirements and for multiple business expansion purposes, such as buying plant and machinery, managing cash flow, training employees, hiring new staff, etc. However, before applying for a business loan, the enterprise must have a good credit score/CIBIL score.
Generally, the credit score ranges from 300 to 900 in any score above 750 is considered good in availing business loans at comparatively lower interest rates. Enterprises with low CIBIL scores do not mean that they will be denied a loan but it becomes tough to get a loan at a relatively low interest rate. For them, we have some suggestions and options to get hassle-free business loans.
Minimum Credit Score required to get a Business Loan
Credit score which is more than 750 or as close to 900 is considered good by financial institutions. It further enhances the chances of loan approval. core below 750 makes it difficult to avail loans at comparatively low interest rates. Every credit bureau uses different algorithms to calculate the credit score. Out of a total 4 credit bureaus operating in India, including TransUnion CIBIL, Experian, Equifax, and CRIF High Mark; the credit score calculated and managed by CIBIL is considered by most of the lending institutions.
