650 is not a ‘Great' credit score, but it is a ‘Fair' score. It can get you a business loan if you are able to submit substantial documentary proof to support your repayment capacity.
Even if your credit score is as low as 650, you can get a business loan. It is not unlikely, but it will be unfavourable to you. It is up to the bank's discretion whether or not to lend you money. However, you can face unfavourable terms in terms of interest rates, loan tenure, loan amount, if you apply for a business loan with such a low credit score.
Additional Reading: Can I Get A Loan With A Credit Score Of 650
The lender will consider other criteria to process the loan. With a low credit score, the loan application process with be a bit more stringent and you may have to submit additional supporting documents to establish your loan repayment capacity. You may be asked to provide collateral/guarantee for the loan.
You could check your credit score before applying for the loan and if possible, take some simple measures to improve your credit score so that you get better loan terms and interest rates.
Additional Reading: How to get business loan with bad credit?
Here are some simple steps to improve your 650 credit score
- Do not exceed 30% of your credit limit: Not only should you never surpass your credit limit, but you should also never exceed 30% of it. Spending more than 30% of your profits on a regular basis means that you have an issue with financial restraint and do not have enough funds to fulfil your repayment obligations.
- Make timely and complete payments: Making on-time and full payments is one of the most straightforward ways to maintain a good credit score and history. Pay your monthly credit card bill in full and on time; this single action would have a direct positive impact on your credit score.
- Applying for too many credit cards in a short period of time is not a good idea: If you apply for too many credit cards in a short period of time, lenders can believe you're 'hungry' for credit. If you submit so many applications without getting subsequent approvals, your credit score will suffer.
Additional Reading: How Do I Qualify For A Business Loan?
Conclusion
It’s possible to get a business loan with a credit score as low as 650. However, the borrower will be offered high-interest rates and other unfavourable terms with such a low score. It is better to check your credit score before applying for the loan and taking the necessary steps to improve your score.