Business Loan Requirements: Revenue, Credit Score & Time in Business

Every loan product has specific qualification thresholds. Knowing these requirements before you apply saves time and prevents unnecessary credit inquiries. Here are the actual requirements for each major loan type, based on typical lender standards in 2026.

Note: These are general guidelines. Individual lenders may have stricter or more flexible requirements. We will match you with lenders whose criteria fit your profile.

SBA 7(a) Loans: The Gold Standard

SBA 7(a) loans offer the best rates and longest terms available for small business financing. The trade-off: stricter requirements and longer approval times.

Additional SBA Requirements:

• For-profit business operating in the United States
• Meet SBA size standards for your industry (NAICS code)
• No recent bankruptcies (typically 3+ years since discharge)
• No defaults on federal debt (student loans, SBA loans, etc.)
• Owner(s) must have equity injection ("skin in the game")
• Legal business structure (LLC, Corp, Partnership, Sole Prop)

Term Loans: The Flexible Middle Ground

Term loans from banks and online lenders have less stringent requirements than SBA but typically shorter terms and higher rates.

What Term Lenders Emphasize:

• Banks: Focus on financials, credit, relationships, and collateral
• Online lenders: Focus on cash flow patterns in bank statements
• Both: Want to see clear loan purpose and repayment ability

Equipment Financing: Asset-Based Lending

Equipment financing uses the equipment itself as collateral, making it more accessible for businesses with limited assets or shorter operating histories.

Equipment Financing Works Best For:

• Machinery and manufacturing equipment
• Commercial vehicles (trucks, vans, trailers)
• Medical and dental equipment
• Restaurant equipment
• Technology hardware and IT infrastructure
• Construction equipment

Business Lines of Credit: Flexible Access

Lines of credit provide revolving access to funds. You draw what you need and pay interest only on what you use.

Line of Credit Considerations:

• Secured lines: Lower rates but require collateral (real estate, equipment, AR)
• Unsecured lines: Higher rates, lower limits, but no collateral required
• Revolving: Reuse available credit as you pay down balance
• Annual reviews: Most lines require annual financial updates for renewal

Invoice Factoring: Customer Credit Matters

Factoring advances cash against your outstanding invoices. Qualification depends more on your customers than on your business.

Merchant Cash Advances: Easiest Access, Highest Cost

MCAs provide fast funding based on future sales. They have the lowest barriers to entry but the highest effective cost. Use with extreme caution.

When MCAs Make Sense (Limited Cases):

• Emergency capital need with no other options
• Short-term opportunity with clear ROI exceeding MCA cost
• Bridge financing while waiting for longer-term funding
• You fully understand the cost and have a repayment plan

Quick Reference: Requirements by Loan Type

Here is a side-by-side comparison of minimum requirements across all major loan types:

Improving Your Qualification Profile

If you do not meet requirements today, here is what moves the needle fastest:

• Credit score: Pay credit cards below 30% utilization, dispute errors, become an authorized user on an old account
• Time in business: Cannot be accelerated — but 6 more months often unlocks new products
• Revenue: Focus on profitable revenue, not just top-line growth
• Cash flow: Reduce unnecessary expenses, improve collections, build reserves
• Documentation: Keep clean books, reconcile monthly, prepare current financials

Requirements exist for a reason: lenders want to fund businesses that can repay. Meeting or exceeding these thresholds does not guarantee approval, but it gets you in the door. The rest depends on how you present your application and whether the loan makes sense for both parties.