The three gates: time, revenue and credit
Almost every product screens on the same three factors before anyone reads a document. Time in business shows the underwriter you have survived at least one cycle. Monthly revenue shows there is cash to repay from. Credit score shows how you have handled obligations before. Products differ in where they set each floor, and that difference is the whole map of small-business funding.
At the fast end, merchant cash advances and working-capital products accept six months of operation, roughly $10,000 a month in deposits and credit scores from about 500, because they price the risk into the factor rate and collect daily. At the slow end, SBA 7(a) loans expect two or more years, a profitable history, credit in the mid-600s and above, and often a personal equity injection, in exchange for ten-year terms at the lowest published costs.
Everything else sits between. Online term loans and lines of credit generally want one to two years, $15,000 to $25,000 a month, and scores around 600 to 640. Equipment financing and invoice factoring bend the rules because the asset or the invoice carries the risk: a newer business with weaker credit can still qualify if the equipment holds value or the customer paying the invoice is strong.
| Product | Typical amount | Time to fund | Cost (market range) | Minimums |
|---|---|---|---|---|
| Merchant cash advance | $5,000 – $500,000 | Same day to 2 business days | Factor rate 1.15 – 1.49 (paid as a fixed amount, not interest) | 6 months in business; 500+ (revenue matters more than score) |
| Working capital loan | $5,000 – $250,000 | 1 – 2 business days | APR roughly 15% – 60%; short-term products may quote a factor rate instead | 6 months in business; 550+ typical |
| Revenue-based financing | $25,000 – $2,000,000 | 2 – 7 business days | Repayment cap of 1.1x – 1.5x the advance | 6 – 12 months in business; Revenue-driven; 550+ typical |
| Business line of credit | $10,000 – $250,000 | 1 – 3 business days to open; draws often same day | APR roughly 10% – 60%; some lenders price as a weekly fee on the drawn balance | 6 – 12 months in business; 600+ typical |
| Business term loan | $10,000 – $500,000 | 1 – 3 business days (online lenders) | APR roughly 8% – 45% depending on credit, revenue and term | 1 – 2 years in business; 600+ typical; 640+ for better pricing |
| Equipment financing | $10,000 – $2,000,000 (up to 100% of equipment cost) | 2 – 5 business days | APR roughly 7% – 30% | 6 months – 2 years (equipment secures the loan); 600+ typical; strong equipment can offset weaker credit |
| Invoice factoring | $10,000 – $5,000,000 (70% – 90% advance on eligible invoices) | 1 – 3 business days after setup | Factoring fee 1% – 5% of the invoice per 30 days | No minimum in many cases; the customers' credit matters most; Owner credit is secondary to customer credit |
| SBA loan | $50,000 – $5,000,000 (7(a)); up to $50,000 for microloans | 30 – 90 days | Variable APR capped by SBA rules: prime plus 2.25% – 4.75% in most cases | 2+ years in business (some programs accept startups with strong plans); 650+ typical; 680+ preferred |
Documents by product
The document list scales with the product’s cost. Cheaper capital needs more proof. The table shows what is typically requested at application, not what may be asked for later in underwriting. Having the full set ready before you apply is the single biggest factor in how fast an application funds.
| Product | Bank statements | Tax returns | Financial statements | Other |
|---|---|---|---|---|
| Merchant cash advance | 3–6 months | Rarely | Rarely | Government ID, voided check, processing statements if card-heavy |
| Working capital loan | 4–6 months | Sometimes (1 year) | Sometimes | ID, voided check, debt schedule |
| Revenue-based financing | 6 months + platform data | Sometimes | Sometimes | Read-only access to sales, ads or accounting platforms |
| Business line of credit | 6–12 months | Often (1–2 years) | P&L and balance sheet | ID, debt schedule, formation documents |
| Term loan | 6–12 months | Usually (1–2 years) | P&L and balance sheet | Debt schedule, use of funds, formation documents |
| Equipment financing | 3–6 months | Often for larger amounts | Sometimes | Equipment quote or invoice, vendor details |
| Invoice factoring | 3 months | Rarely | Accounts receivable aging | Sample invoices, customer list, contracts |
| SBA 7(a) | 12 months | 2–3 years business and personal | Interim P&L, balance sheet, projections | Business plan, debt schedule, resumes, lease, collateral details, SBA forms |
What "credit score" means to each product
Personal credit is checked for almost every product, because owners guarantee the debt. The check is usually a soft pull at application and a hard pull at closing for term and SBA products; fast products often stay soft throughout. The score floors in the guideline table are typical, not absolute: a strong file on revenue and time in business can offset a score below the floor, and a thin or recently damaged file can fail above it.
What underwriters read beyond the score: recent late payments, especially on business obligations; open collections and judgments; bankruptcies within the last three to seven years; high revolving utilisation; and recent hard inquiries, which suggest you are applying widely. Business credit, through Dun & Bradstreet, Experian Business or Equifax Business, matters mainly for bank and SBA products and for larger equipment deals.
If your score is the weak point, the products that weigh revenue over score are merchant cash advances, revenue-based financing, invoice factoring and, for the asset itself, equipment financing. The bad-credit guide on this site goes deeper on strengthening a file.
Collateral, guarantees and liens
Unsecured products, which include most advances, lines and online term loans, do not require specific collateral but almost always take a personal guarantee and file a blanket UCC lien on business assets. Secured products attach to something specific. Equipment financing is secured by the equipment. Factoring is secured by the invoices. SBA lenders take available business assets and, for larger loans, may require personal real estate as additional collateral, although lack of collateral alone is not supposed to be the reason for an SBA decline.
Collateral changes the requirements in your favour. A business at eight months with a 590 score cannot get a term loan, but it can usually finance a $60,000 excavator at up to 100 percent of cost, because the lender can recover the machine. A staffing company with weak credit but invoices to a Fortune 500 customer can factor those invoices at 85 to 90 percent, because the customer’s credit is what matters.
Every owner with 20 percent or more ownership is usually required to sign the guarantee and is checked. Businesses with many small owners, or with an owner who has serious credit problems, should raise that early because it affects which products and which funders are available.
Industry and other restrictions
Some industries are excluded or restricted by many funders: adult entertainment, cannabis under federal law, firearms dealers with some providers, gambling, crypto and speculative real estate. Others are simply priced as higher risk: restaurants, trucking, construction and seasonal retail see lower multiples and higher costs. Medical, dental, veterinary, professional services and established manufacturing are treated as lower risk.
Other common requirements: a US business bank account in the business’s name, held for the period covered by the statements; an EIN and formation documents for an LLC or corporation, or a DBA for sole proprietors; a physical US address; owners who are US citizens or permanent residents for SBA products; no open bankruptcy; and no current default on another funder’s agreement.
Home-based businesses, businesses that mainly deposit cash, and businesses whose revenue runs through a personal account face extra questions. Moving revenue into a dedicated business account for at least three months before applying solves most of them.
Which product fits which stage
Under six months: equipment financing for a needed asset if credit is fair, otherwise personal resources and vendor terms. Six to twelve months with $10,000 or more in monthly deposits: merchant cash advance or working capital for short needs, revenue-based financing for online businesses, factoring if you invoice other businesses. One to two years with $15,000 to $25,000 a month and credit around 600 or better: online term loans and lines of credit become the better-priced default.
Two or more years, profitable on tax returns, credit 650 and up: SBA 7(a) and bank term loans for anything long-lived, such as expansion, acquisition, refinancing expensive debt or real estate. At that stage the cheaper products are worth the longer process, and a line of credit alongside them covers the short-term gaps.
The right move is often two products, not one: an asset-secured loan for the equipment and a small line for working capital, or an SBA loan for the long-term project and factoring for the receivables cycle. Matching each need to the product built for it keeps every requirement achievable.