72 Percent of Small Business Owners Don’t Even Know Their Credit Score, Survey Says

Know Your Credit Score? According to Survey, 72 Percent of Small Business Owners Admit That They Do Not

Business credit scores are one of the key factors determining whether or not an enterprise qualifies for a loan. Yet surprisingly enough, most businesses don’t even know what their scores are.

This astonishing revelation has come from a new survey by Manta, an online community for small business owners.

The survey has found a majority (72 percent) of small business owners don’t know their business credit score. In fact, almost 60 percent of respondents don’t even know where they can access their scores.

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The findings are based on a survey of more than 2,900 small business owners.

Key Highlights of the Manta Survey

Some other important findings of the survey include the following:

  • Business credit problems permeate across industries, from electrical (88 percent don’t have a line of business credit) to agriculture (72 percent).
  • Less than one-third of surveyed small business owners have business accounts that are tied to a line of credit.
  • Majority of businesses in restaurants (92 percent) and beverages (86 percent) said they are not aware of their business credit score.

Why You Should Know Your Credit Score

From a small business owner’s perspective, it’s very important to be aware of business credit score to avoid hassles with securing loans.

A business credit score, in essence, reflects your company’s creditworthiness. So apart from impacting your ability to get approvals for loans, it influences commercial partners when they determine extensions of lines of credit.

What’s more, government and large corporation contracts have minimum business credit score requirements. In other words, a bad credit score may lessen your chances of bagging a big contract.

Levi King, co-founder and CEO of Nav told The Huffington Post, “I’ve learned firsthand how a solid business credit history can help—or hinder—your business growth. For example, I missed out on a large job for the sign company because it didn’t have a strong business credit rating.”

How is a Business Credit Score Calculated?

When calculating a business credit score, several factors are taken into consideration. These may include payment history, credit utilization ratio, outstanding debts, company size and more.

These calculations are made by three credit bureaus: Experian and Equifax, Dun & Bradstreet’s PAYDEX and FICO’s SBSS.

Poor Credit Score Photo Via Shutterstock 3 Comments ▼

Shubhomita Bose Shubhomita Bose is a Staff Writer for Small Business Trends. She covers key studies and surveys about the small business market, along with general small business news. She draws on 8 years of experience in copywriting, marketing and communications, having worked extensively on creating content for small and medium sized enterprises.

3 Reactions
  1. It is because of financial reports. Sometimes, you just leave it to someone and then forget about it. But it is something that owners must be knowledgeable about.

  2. Many small business owners are so involved in the business that they don’t have time to work on their business. Take financial statements, most small business owners cannot tell you where the information on a Profit and Loss Statement comes from. I tend to agree with Aira Bongco that they leave it to someone else. However, if your accountant isn’t explaining or teaching you about your financials then maybe it’s time to fire your accountant and find someone that will.

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