FICO SBSS (Small Business Scoring Service), Become Bankable, Small Business Scoring

We are all aware that FICO scores are the standard for all things consumer lending for personal credit cards, cars, houses and much more. Now, FICO SBSS scores have become the standard for business lending approvals. This new standard in business credit scores is now being utilized by over ten thousand business cash type lenders such as banks, credit unions, large fintech lenders and the SBA.

For example, the SBA is using FICO SBSS in their approval process with a minimum score of 155 being required for approval. With most other lenders, such as banks, requiring at least a 160 score.

The FICO SBSS score is typically not used for approvals all by itself.

In most cases these working capital type lenders will use other factors in their approval algorithms with things like time in business, industry, market size, gross annual revenue, profit margins, tax returns, and bank statements etc. Conversely, personal FICO scores are often used as the sole basis for personal lending approvals.

Business FICO scores are most often used as a method of declining applications along with determining the loan offer amount, rate and term. Generally, if your business FICO SBSS is below a 160 you will be declined. The range of FICO SBSS is 0 to 300 with any score of 160 and above being considered good. The hard part of determining your business FICO SBSS is that every lender has the ability to design and configure their own.

For their FICO SBSS scoring method lenders have a list of items they can select from such as:

• 35% of the FICO business score - Can be the personal credit of up to five owners who own 20% or more of the business.
• 50% of the FICO Business score - Can be the time in business, bank rating, web presence, industry, gross annual revenue, net income, gross margins, and debt to income.
• 15% of the FICO business score - Can be the business credit reports at 5% each the major reporting agencies; Experian, Equifax and Dun & Bradstreet.

This means that your business FICO SBSS score might be different at Wells Fargo than it is at Bank of America. The score at one institution versus another might vary by as much as 20 to 30 points making it critical that your business develops a profile that will assure your business has a mid-range of about a 200 score so that you cover those variances.

In the process of having your business become bankable, and in its ability to develop a business FICO score of about 200, you will need to optimize each of the following:

• Lender Compliance - Lender Compliance is a series of about twenty items that includes having a Google Business profile, a US Post Office recognized business address, not operating your business from a cell phone or a free Gmail account, being an entity of an LLC or Corporation, making sure that entity is in good standing and does not create a trademark infringement and a few more items.
• A Low 5 Bank Rating - Maintaining a Low 5 Bank Rating requires a minimum of a $10,000 average daily balance in your business general ledger checking account for at least three consecutive bank statement periods that will show the algorithm your business has the ability to service a debt.
• Building Business Credit - Developing 10 to15 reporting business credit tradelines of a substantial size that we help you to build strong business credit profiles with Experian, Equifax and Dun & Bradstreet which all contribute to the business FICO scoring system.
• Becoming Promotable - This is creating and maintaining a web presence score of 500 or above on the scale that is zero to 600. Your web presence score is how the internet positioning bots see your business and are then willing to promote it. It has many factors to it such as your star ratings, reviews, your business social media, your business web site, your NAP validation and more.