Understanding how credit inquiries work with business funding:
Soft Pull vs Hard Pull:
Soft Pull (No Impact):
- ●Used for pre-qualification
- ●Does not affect credit score
- ●You can see it, but creditors can't
- ●Most initial applications start here
Hard Pull (Affects Score):
- ●Used for final approval
- ●Temporarily lowers score (5-10 points typically)
- ●Stays on report for 2 years
- ●Only happens after you accept an offer
When Hard Pulls Happen:
- ●You accept a pre-approved offer
- ●Final underwriting stage
- ●Requesting actual funding (not quotes)
- ●SBA loan applications
Minimizing Credit Impact:
- ●Use pre-qualification tools first
- ●Ask lenders about their inquiry process
- ●Apply to 2-3 targeted lenders, not many
- ●Apply within a 14-30 day window (bundles inquiries)
- ●Don't accept offers you won't use
Business Credit vs Personal Credit:
- ●Many business products check personal credit
- ●Some primarily use business credit bureaus
- ●MCA and invoice financing often don't check credit at all
- ●Building business credit reduces personal credit reliance
Products That Typically DON'T Check Credit:
- ●Merchant Cash Advance (focuses on revenue)
- ●Invoice Financing (focuses on customer credit)
- ●Some revenue-based financing