Business Funding Guide
Most business owners walk into the loan process blind and get turned down. Here are the exact numbers lenders use to decide — credit score, revenue, time in business, and documents — broken down by loan type so you know where you stand before you apply.
Getting turned down for a business loan is usually preventable — most rejections come from applying to the wrong type of lender for your current situation. A bank isn't going to approve a 1-year-old business with a 580 credit score, but a revenue-based lender absolutely will. Knowing the requirements before you apply is the difference between a fast approval and a hard credit pull that damages your score with nothing to show for it.
This guide breaks down the exact qualification standards for every major loan type, so you can find where your business actually fits.
Whether you're applying to a bank, an SBA lender, or an alternative online lender, they're all looking at variations of the same five factors:
Alternative lenders weight these differently than traditional lenders. Knowing which factors matter most for each loan type is the key to picking the right option.
| Loan Type | Min Credit | Min Time in Biz | Min Monthly Revenue | Collateral | Typical Approval Time |
|---|---|---|---|---|---|
| Merchant Cash Advance | 500+ | 6 months | $10K/mo | None | 1–4 hours |
| Short-Term Business Loan | 550+ | 6 months | $12K/mo | Usually none | Same day–24 hrs |
| Business Line of Credit | 580+ | 6–12 months | $15K/mo | Usually none | 1–3 days |
| Equipment Financing | 550+ | 6 months | $10K/mo | Equipment itself | 1–3 days |
| Invoice Factoring | 500+ | 3–6 months | N/A (invoice quality) | Invoices | 24–72 hours |
| Online Term Loan | 600+ | 1 year | $15K–$25K/mo | Sometimes | 1–3 days |
| SBA 7(a) Loan | 650–680+ | 2 years | Varies (DSCR 1.25+) | Required >$25K | 30–90 days |
| Traditional Bank Loan | 700+ | 2+ years | Strong financials | Usually required | 30–90 days |
The short answer: it depends entirely on where you're applying. The confusion comes from lenders advertising vague "credit requirements" without specifying whether they mean personal FICO, business credit score (PAYDEX or SBSS), or some combination.
For small businesses under 5 years old: personal credit score is what matters. Most small businesses don't have enough of a business credit history to be evaluated independently, so lenders run a personal credit check on the owner(s).
Good to know: Most alternative lenders and MCA providers do a soft credit pull during prequalification — this doesn't affect your credit score. Only the final approval typically triggers a hard pull. FundCapa uses a soft pull only during the initial review.
When alternative lenders say "monthly revenue," they almost always mean average monthly bank deposits from your last 3–6 bank statements — not revenue as reported on your tax return.
This is an important distinction. Tax returns can show a lower number due to deductions and accounting adjustments. Your bank statements show what actually moved through your account. For most businesses, the bank deposit figure is higher and more favorable.
Alternative lenders use deposits as a proxy for actual business activity because:
FundCapa reviews your bank statements and matches you to the best available program with a soft pull only. No impact on your credit score.
See My Options — Soft Pull Only →The 6-month mark is a meaningful threshold in alternative lending. Below it, your options are quite limited. At 6+ months, a majority of alternative products become available. At 2+ years, SBA and bank products open up.
If your business is less than 6 months old, your primary options are:
A bank won't approve a 1-year-old business with a 580 credit score. An MCA provider won't want you applying for $800,000 when you do $15K/month in revenue. Match your current profile to the right loan type before applying.
Lenders look at whether your monthly cash flow can service the proposed debt. A general rule: your monthly payment shouldn't exceed 15–20% of your monthly deposits. If you do $20K/month, don't apply for $500K over 12 months — that's $42K/month in payments you can't cover.
If you already have one or more active MCAs, lenders can see the daily deductions on your bank statements. Multiple simultaneous MCAs (called "stacking") is a red flag that triggers higher factor rates or outright declines. Pay down existing advances before applying for new capital.
Lenders look at your average daily balance, not just deposits. A business that deposits $30,000 per month but has an average daily balance of $200 is running on empty. This pattern suggests cash flow problems regardless of top-line revenue.
Some industries face restrictions from certain lenders — cannabis (banking issues), firearms dealers, adult entertainment, and certain financial services businesses. If your industry is restricted, the solution isn't to hide it — it's to work with a broker who knows which lenders actively serve your sector.
If you're not where you need to be today, these are the most impactful steps to improve your position over 3–12 months:
At FundCapa, we work with a network of 20+ lenders to match each business with the right product. Our own baseline for most programs:
If you have a 500 credit score, 7 months in business, and $15K/month in deposits, you qualify for revenue-based funding and likely short-term loans. If you have a 700 credit score, 3 years in business, and $50K/month in revenue, you likely qualify for all six of our programs including SBA.
One application lets us review all options and present what you actually qualify for — not what you hope you do.
One-page application, soft pull only. FundCapa reviews your profile across 20+ lenders and presents the programs you actually qualify for.