Hard and soft pull credit inquiries for businesses

Applying for a business loan? Know the difference between hard and soft pull inquiries that check your creditworthiness.

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If you are considering a business loan, it’s important to know that your business will be subjected to hard and soft pull credit checks. This helps lenders get an idea of your business’s overall financial health and whether or not it’s in a position to make repayments.

This guide will help you understand the difference between a soft and hard pull credit check to help you keep your credit score high.

How do credit inquiries affect my chances of being approved for a business loan?

When you apply for a business loan, lenders will undertake a credit check to verify your business’s financial status.

Your personal and business’s credit scores are a major deciding factor for lenders. If a credit check reveals a weak credit profile, this will have a detrimental effect on your chances of securing a business loan.

Defaulting on payments or applying for several loans or credit cards within a short period implies impulsive behaviour and financial irresponsibility. Lenders also look at applications submitted to other lenders. If you’ve been refused credit several times in the past, this can damage your credit score and your business’s financial reputation in general.

The difference between hard and soft pull credit checks

Not all credit checks negatively affect your credit score. Lenders do two kinds of checks before approving or denying a business loan application.

  • Soft pull inquiries

Individual and business profiles are subjected to soft pull inquiries everyday without being aware of it. Lenders can do a soft pull check for an overall idea of your financial status before pre-approving your application, or credit bureaus can soft pull your file if you request your credit score.

Soft pull inquiries have no impact on your credit score, but may be noted as a file access.

  • Hard pull inquiries

Hard pull credit inquiries involve an official check of your credit report. When you apply for a car loan, personal loan or home loan and allow a lender to check your credit file, the lender will conduct a hard pull. While soft pull inquiries have zero effect, hard pull checks are listed on your credit file and therefore can affect your credit score.

Every hard pull credit check is listed on your credit report, including which lenders have denied previous applications and how many times you’ve applied for loans in the past. Too many hard pull inquiries in a short space of time can negatively impact your credit score.

You have to give the lender permission to conduct a hard pull inquiry. Before submitting a loan application, make sure that your business meets all the criteria and has a good chance of being approved. While a hard pull will reflect on your credit report either way, carefully considering your loan options can help avoid adding rejected applications to the list.

Limiting the damage

  • Keep an eye on your credit file. You can request a copy of your credit report for free, once a year to get an accurate idea of your financial status. This counts as a soft pull check, so it won’t impact your credit score.
  • Check the lending criteria. Since every hard pull is listed on your credit profile, check that your business meets the lending criteria before submitting an application. Only apply for loans that you have a good chance of securing.
  • Limit your credit applications. Be selective about where you apply and how many applications you submit. Multiple applications to different lenders shows desperation and irresponsibility, neither of which inspires lenders’ faith.

Compare business loan options

Data updated regularly
Name Product Min. Loan Amount Max. Loan Amount Loan Term Upfront Fee Filter Values
Moula Business Loan
$5,000
$250,000
1 to 2 years
2% Establishment fee
A loan of up to $250,000 that can be approved and funded within 24 hours. Available to businesses with 6+ months operating history and $5,000+ monthly sales.
Valiant Finance Business Loan Broker
$5,000
$1,000,000
3 months to 5 years
$0 application fee
A Business Lending Specialist from Valiant Finance can give you access to competitive business loans from over 70 lenders. Loans between $5,000 and $1 million are available. Request a call – your loan can be funded in 1 business day.
Max Funding Unsecured Business Loan
$2,000
$30,000
1 month to 1 year
$0 application fee
An unsecured business loan from $2,000 that offers convenient pre-approval and no early repayment fees.
OnDeck Business Loans
$10,000
$250,000
6 months to 2 years
3% of loan amount
Apply for up to $250,000 and receive your approved funds in one business day. Minimum annual turnover of $100,000 and 1 year of trading history required.
Prospa Business Loan
$5,000
$300,000
3 months to 3 years
3% origination fee
Small business loans are available from $5,000 - $300,000 on terms of up to 3 years. At least twelve months trading history and a monthly turnover from $6,000 is necessary.
ANZ Secured Business Loan
$10,000
$10,000,000
Up to 15 years
$600
Benefit from a low rate when you secure this loan with property and/or business assets. Loans from $10,000 available.
Westpac Business Loan
$5,000
$1,000,000
1 to 30 years
$0 application fee
Purchase a new vehicle, equipment or support your cash flow with a business finance solution from Westpac.
ANZ Unsecured Business Loan
$10,000
$1,000,000
Up to 15 years
$600
Apply for a loan from $10,000 with no security required and benefit from flexible repayment terms.
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If your business has a few outstanding invoices, invoice financing can help manage your cash flow and get access to funds you need. It's a type of business loan that is secured by the unpaid invoices and comes with reduced risk, no asset requirements or interest payments.

Data updated regularly
Name Product Min. Loan Amount Max. Loan Amount Loan Term Upfront Fee Filter Values
Timelio Invoice Finance
$10,000
$100,000,000
Up to 4 months
$0
Get up to 100% of the value of your invoices without having to wait for customer payments, and with no minimum turnover or operating history required.
ScotPac Invoice Finance
$10,000
$150,000,000
From 1 year
No set amount
Improve your business cash flow by financing your outstanding invoices. No minimum trading history required, but minimum 12 - month term and $10,000 in invoices.
ScotPac Selective Invoice Finance
$10,000
$1,000,000
1 to 3 months
$500
Finance your unpaid invoices on demand with terms of 1 - 3 months. 95% of invoice is paid upfront, with no minimum trading history required.
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