As a small business owner, you may need outside capital to expand and take your business to the next level. You may know your personal credit score, and even have a good idea of how credit-worthy your company might be. But do you know your company’s Small Business Scoring Service (SBSS) score? If you’re looking for financing as a small business owner, you’ll want to learn all you can about the SBSS.

Many small business owners look to the Small Business Administration (SBA) to help with financing to turn that great business idea into a profitable business reality.

The SBA guaranty processing center has been using the Small Business Scoring Service for several years, and in June 2012, the SBA began using this business credit reporting service as part of the Small Loan Advantage Pilot program, providing lower-dollar SBA 7(a) loans to smaller businesses – an incentive program to motivate more growth in the small business sector across all industries.

To qualify for any SBA guaranty on business loans of $350,000 or less, a business must maintain an SBSS score of 140 or better. Your company’s SBSS score may also affect your ability to access capital from traditional lenders, like banks, as well as from alternative or online business lenders.

What is the SBSS Score? In the early 1990s the Fair Isaac Corporation (FICO) developed SBSS as a way to score business credit. It is the same company that developed the FICO score commonly used to rank personal credit. 

What determines the score? Although FICO’s formula is proprietary, in general each company’s SBSS score is based on two key risk barometers: (1) the company’s history of payments; and (2) the financial and personal credit histories of company principals. Scores range from 0 to 300.

The supporting documentation to substantiate an SBSS score includes such documents as:

·         previous company loans

·         a history of payments to vendors, sub-contractors and other stakeholders

·         business capital assets (commercial property, equipment, intellectual properties, etc.)

·         company receivables

·         credit histories of all principals – especially owners

·         pooled data available from other sources, from a mortgage to a college loan

If you have a brand-new company with no business history, you will probably have a low SBSS score, but even established small businesses depend heavily on the personal credit histories of their principals.  

How is the SBSS score used? It’s used to simplify the loan assessment process of lenders. Just as you have a personal credit score based on a history of payments, your company’s SBSS score simplifies the approval process undertaken by banks to evaluate a company’s application for loans or lines of credit.

Simply put, thousands of lenders – sources of business capital – use your company’s SBSS score to determine whether the business is worth the risk of a large capital loan. If the company fails to meet SBSS minimums, it becomes more difficult (and generally more expensive) to obtain business financing through traditional sources.

Before you apply for an SBA-backed loan, or a loan from any commercial lender, talk to the bank’s business professionals about ways to present your company most favorably and increase your SBSS score if that’s what needed to get qualified for financing. Click here for an article on how to build up your company’s credit history.


The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of ZB, N.A.