Practical funding guide · Updated September 2026

How to Get a Small Business Loan

Short answer

Getting a small business loan takes five steps: define the amount and use, check the payment against your cash flow, prepare six months of bank statements and a debt schedule, compare products on total payback rather than headline rate, and read the offer terms before signing. Most businesses with six months of history and $10,000 or more in monthly revenue have at least one realistic option.

Updated September 21, 2026 · market ranges reviewed monthlyRead next: Business Loan Requirements by Product (2026)

A useful funding process starts before the application. Define the business need, prepare a consistent file, compare structures on the same basis, and understand every obligation before accepting an offer.

This guide walks through the whole process: deciding what to ask for, understanding how funders read your bank statements, comparing all eight common product types on one cost basis, assembling documents, reading the state-mandated disclosures, and spotting the practices that hurt small businesses. It is written by funding specialists, so the section on how they fit is deliberately candid.

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8product types compared

24–72 htypical decision window

No hard pullto check eligibility

5+ yearsin the industry

Before you apply

What lenders are really deciding

Every business-funding decision answers two questions: will this business generate enough cash to make the payments, and what happens if it does not? Everything a lender or funder asks for, from bank statements to a personal guarantee, is an attempt to answer one of those two questions. Once you see applications that way, the process stops feeling arbitrary.

The first question is answered mostly by revenue, cash flow and existing obligations, which is why bank statements carry more weight than a business plan for anything under a few hundred thousand dollars. The second question is answered by credit history, collateral, guarantees and time in business, which is why weaker credit does not end the conversation but does change the products and the price.

Small-business funding in the United States is not one market. Banks and SBA lenders sit at one end with the lowest pricing, the most documentation and the longest timelines. Online term-loan and line-of-credit lenders sit in the middle. Merchant cash advance and revenue-based providers sit at the fast, expensive end and are not lenders at all in the legal sense: they purchase a share of future receipts. A funding specialist like AIDBIZ works across that whole range, which is why the same application can produce very different answers depending on where it is sent.

Two practical consequences follow. First, prepare the file before asking anyone, because the first thing you send tends to become the file. Second, compare on total dollar cost and payment pressure rather than on a rate, because the products describe cost in incompatible ways. The rest of this guide is built around those two ideas.

Five deliberate steps

Prepare first. Apply with context.

The order matters. Businesses that start at step four, collecting offers, usually end up back at step one after the offers come in.

Define the use and amount

Write down the specific business purpose, the amount it requires, when the money must be available, and the measurable result you expect. Separate an urgent operating gap from a planned investment.

Most weak applications fail before underwriting because the request is vague. "I need $75,000 for working capital" tells a funder nothing about repayment. "I need $75,000 to buy inventory for the September-to-December season, which produced $310,000 in sales last year at a 38% gross margin" is a request an underwriter can price.

The business purpose in one sentence, and whether it is a planned investment or an operating gap
The amount, built up from a quote, invoice, budget or payroll schedule rather than a round number
The date the money must be available and what happens if it arrives two weeks later
The measurable result: added revenue, a cost avoided, a contract secured, a piece of equipment that replaces a rental

Separating urgent gaps from planned investments matters because they point to different products. A gap is usually a line of credit or short-term working capital question; a planned investment with a multi-year payoff is a term loan, equipment financing or SBA question.

Build a conservative repayment view

Review average monthly revenue, normal operating expenses, current debt payments, seasonality, and a downside case. A payment should fit the business without relying on perfect future sales.

Funders build a cash-flow view of your business from bank statements whether you do or not. Doing it first lets you catch the problems they will find and set an amount the business can actually carry.

Average monthly deposits over the last 6 months, and the lowest month
Normal operating expenses including rent, payroll, supplier payments and owner draws
Every existing loan, advance, lease and lien with its payment amount and frequency
A downside case: what payments look like if revenue drops 20% for a quarter

A useful rule of thumb from published underwriting guidelines: total debt payments, including the new one, should stay comfortably inside free cash flow after expenses. Daily-remittance products are where this breaks first, because a fixed daily amount does not shrink in a slow week.

Prepare a complete file

Gather recent business bank statements, business and owner identification, formation records, tax returns or financial statements when requested, existing-debt details, and support for the intended use.

A complete, consistent file is the single biggest controllable factor in both speed and pricing. Missing pages, mismatched names and unexplained deposits trigger conditions, delays and sometimes a lower offer.

Business bank statements (all pages, most recent 3 to 6 months; 12 months for some products)
Government ID for each owner with 20% or more ownership, plus formation and EIN records
The most recent business tax return, and year-to-date profit-and-loss and balance sheet for larger or longer-term requests
A schedule of existing debt and any open advances, including payoff balances
Support for the use of funds: quote, invoice, contract, lease or budget

Keep the file consistent: the legal name on the bank account, the tax return and the application should match, and the revenue you state should be visible in the deposits.

Compare the right structures

Consider term loans, lines of credit, SBA-backed options, equipment financing, factoring, revenue-based financing, and other products according to purpose—not headline speed alone.

The eight product types compared later on this page describe cost, term and payment in very different ways. Choosing by headline speed or by the first offer that arrives is how businesses end up with the wrong structure.

Match the term to the life of the need: do not finance a 5-year asset with a 6-month product
Match the payment frequency to how cash arrives: daily remittance suits card-heavy retail, not a contractor paid every 45 days
Match the security to what you are willing to risk: equipment, receivables, a blanket lien or a personal guarantee
Rule out what you cannot qualify for yet, and note what would change that in 6 to 12 months

Use the comparison pages linked throughout this guide to see two structures side by side, and the funding-by-amount pages to see what typically applies at your amount.

Review the offer before signing

Confirm the funding amount, total repayment, payment amount and frequency, term, fees, prepayment treatment, collateral or guarantee, default provisions, and who is providing the capital.

Read the agreement, not the summary email. The document controls. Every item below should be visible in the contract itself, and any that is missing is a reason to pause.

Funding amount and net proceeds after origination or processing fees
Total repayment in dollars, and the payment amount, frequency and count
Term, or the estimated term for revenue-based products, and what happens if revenue changes
Prepayment treatment: discount, no benefit, or a penalty
Collateral, liens, personal guarantee, confession of judgment or receivables assignment
Default definitions, late fees, cure periods and the remedies the provider can use
Who is providing the capital, who services it, and how the intermediary is compensated

In California and New York, providers of most commercial financing must hand you a standardized disclosure with these figures; the state-disclosure section below explains what to expect.

Inside the decision

How lenders and funders underwrite a file

Underwriting for most products under $500,000 is bank-statement underwriting. An analyst, or increasingly a model, reads 3 to 12 months of business bank activity and asks whether the proposed payment fits inside it. Tax returns and financial statements come into play for term loans above roughly $150,000, for SBA loans, and for anything secured by real estate. The table below lists what each factor means in practice.

Underwriting factors and how they are read
Factor	What they look at	What helps	What hurts
Revenue	Average and lowest monthly deposits; trend over 3 to 12 months	Steady or rising deposits from many customers	Declining deposits, one customer supplying most revenue, large unexplained transfers
Time in business	Months since formation and since the first deposits	2+ years opens bank and SBA products; 6 to 12 months keeps online products available	Under 6 months limits most options to equipment, factoring or a personal-credit-driven product
Credit	Personal FICO of the owners; business credit where it exists	640+ for better term-loan pricing; 680+ for most SBA lenders	Recent defaults, open collections, a bankruptcy inside 2 to 3 years
Bank statements	Daily balances, deposit count, negative days	Average daily balance that covers a few weeks of the proposed payment	Frequent low balances; balance that hits zero before each deposit
NSFs and overdrafts	Returned items and overdraft fees per month	Zero to 2 in the last 3 months	3 or more NSFs in a month is a common automatic decline for many funders
Existing positions	Open loans and advances, daily or weekly debits, liens on file	One position with a clear payoff plan	Multiple advances (stacking); a new advance used to service an old one
Industry risk	Sector default history, seasonality, regulatory exposure	Healthcare, dental, professional services, established B2B trades	Some funders restrict or price up cannabis-adjacent, gambling, adult, crypto, some trucking and some restaurant profiles
Use of funds	Whether the purpose supports repayment	Inventory for a proven season, revenue-producing equipment, a signed contract	Refinancing other high-cost advances, covering chronic losses, undisclosed personal use

Revenue and deposits

Funders count deposits, not invoices. Transfers from a personal account, loan proceeds and large one-off refunds are usually backed out, so stated revenue that is not visible in deposits creates an immediate credibility problem. Many revenue-based providers set a floor around $10,000 to $15,000 in monthly deposits; term-loan lenders often look for $100,000 or more in annual revenue.

Time in business

Time in business is a proxy for survival. Two years is the common threshold for banks and most SBA lenders. Six months keeps merchant cash advances, working-capital loans and some lines of credit available. Under six months, the realistic options are equipment financing (the asset is the security), invoice factoring (your customers’ credit is what matters) and products driven by the owner’s personal credit.

Credit

Personal credit still matters for a business loan because nearly every product carries a personal guarantee. The score sets the product menu more than it sets the price: below 600, revenue-based products dominate; 600 to 680 opens online term loans and lines; above 680 opens SBA and bank pricing. Business credit files (Dun and Bradstreet, Experian Business) matter more as the business grows and borrows from trade creditors. The bad-credit business loans page goes deeper on what is realistic in each band.

NSFs, overdrafts and negative days

A returned payment (NSF) tells a funder that the account ran out of money on a day when a payment was due, which is exactly the risk they are pricing. Three or more NSFs in a month is an automatic decline for many providers, and negative balance days are read the same way. If you have had a bad month, wait for two clean months before applying to fast products, or lead with an explanation and the documents that show it was a one-off.

Existing positions and stacking

Every open loan or advance shows up as recurring debits, and every lien shows up in a UCC search. Funders total those debits against deposits to see what capacity remains. Taking a second advance while the first is open, known as stacking, is prohibited by most agreements, is visible to the first provider within days, and is the most common precursor to default. Consolidation of existing positions is sometimes possible through a term loan or line of credit; ask before adding another daily debit.

Industry risk

Every funder maintains a list of restricted or excluded industries and a set of industries it prices favorably. Healthcare, dental, professional services and established B2B trades usually see the best pricing. Restaurants, trucking, construction and retail are widely funded but with closer attention to seasonality and margins. A funding specialist’s job includes knowing which partner is comfortable with which industry, which is why an auto-declined file at one provider can be approved at another.

Eight product types

Full product comparison

The ranges below are published market guidelines compiled in September 2026 from lender and marketplace disclosures. They are not AIDBIZ offers, and any single funding partner will sit inside a narrower band. Use them to rule products in or out before you spend time on applications.

Published market guidelines for the eight common small-business funding products
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)
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
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
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
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
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
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

Merchant cash advance

Best for: Fast working capital when revenue is steady but credit or time in business rules out bank financing.

Payment: Daily or weekly remittance from revenue. Term: 3 – 18 months (remittance schedule, not a fixed term).

Watch for: Daily remittance can strain thin-margin weeks; Cost is fixed: paying early does not reduce it unless a prepayment discount is written in; Stacking multiple advances quickly becomes unaffordable.

MCA in Georgia · MCA in California

Business term loan

Best for: One-time investments with a clear payoff: equipment, buildout, expansion, refinancing expensive debt.

Payment: Fixed weekly or monthly payment. Term: 6 months – 5 years.

Watch for: Personal guarantee is standard; Origination fees of 1% – 5% are common; Prepayment terms vary; ask before signing.

Term loan in Georgia · Term loan in California

Business line of credit

Best for: Recurring or unpredictable needs: payroll gaps, inventory restocks, seasonal dips.

Payment: Weekly or monthly on the drawn balance only. Term: Revolving; 6 – 24 month draw periods are typical.

Watch for: Unused lines can be reduced or closed by the lender; Draw fees and maintenance fees add up; Rates are often variable.

Line of credit in Georgia · Line of credit in California

SBA loan

Best for: Long-term, lower-cost capital when the business can wait and has clean financials.

Payment: Monthly. Term: Up to 10 years for working capital and equipment; up to 25 years for real estate.

Watch for: Slow and document-heavy; Collateral and personal guarantee required; Guarantee fees apply on larger loans.

SBA loan in Georgia · SBA loan in California

Equipment financing

Best for: Vehicles, machinery, medical or restaurant equipment, technology.

Payment: Fixed monthly. Term: 2 – 7 years, matched to the equipment's useful life.

Watch for: The equipment is collateral and can be repossessed; Soft costs (installation, delivery) may not be covered; Section 179 tax treatment depends on structure; ask an accountant.

Equipment financing in Georgia · Equipment financing in California

Invoice factoring

Best for: B2B businesses waiting 30 – 90 days on invoices: trucking, staffing, construction subcontractors, wholesale.

Payment: Settled when the customer pays the invoice. Term: Per invoice; 30 – 90 day invoice cycles.

Watch for: Customers may be notified (non-notification factoring costs more); Recourse factoring puts unpaid invoices back on you; Fees compound if customers pay slowly.

Invoice factoring in Georgia · Invoice factoring in California

Revenue-based financing

Best for: E-commerce, subscription and seasonal businesses that want payments to flex with sales.

Payment: A fixed percentage of monthly revenue (typically 3% – 10%). Term: Until a fixed repayment cap is reached; commonly 6 – 24 months.

Watch for: Fast growth means faster, costlier repayment; Caps are fixed regardless of how quickly you repay; Some providers require read-only access to sales platforms.

Revenue-based in Georgia · Revenue-based in California

Working capital loan

Best for: Short gaps: inventory before a busy season, payroll, a tax bill, a large order.

Payment: Daily, weekly or monthly. Term: 3 – 24 months.

Watch for: Short terms mean high payments relative to the amount; Renewal offers can create a cycle of borrowing; Compare total payback, not the headline rate.

Working capital in Georgia · Working capital in California

Two-product comparisons with a decision guide for each pair: line of credit vs term loan, merchant cash advance vs term loan, SBA loan vs term loan, equipment financing vs line of credit, invoice factoring vs revenue-based financing and merchant cash advance vs working capital. The resource library lists all fourteen.

Compare on one basis

Cost explained: APR, factor rate and fee

Different products describe cost differently, and the differences are not cosmetic. A 1.30 factor rate and a 30% APR are not the same price.

APR (annual percentage rate)

Term loans, lines of credit, SBA loans and equipment financing quote an interest rate, usually expressed as an APR that folds in origination fees. Interest accrues on the declining balance, so paying early reduces the total cost, and a longer term means a lower payment but more interest overall. APR is the only figure that lets you compare two loans of different lengths fairly.

Factor rate

Merchant cash advances and many short-term working-capital products quote a factor rate: multiply the advance by the factor to get the fixed payback. $50,000 at 1.32 means $66,000 back, full stop. The cost does not decline as you pay, so paying early rarely helps unless a prepayment discount is written in, and the shorter the payback period, the higher the equivalent APR. A 1.32 factor repaid over 9 months is roughly equivalent to an APR in the 70% to 90% range once the daily schedule is accounted for; the same factor over 18 months is roughly half that.

Fee-based pricing

Invoice factoring charges a percentage of the invoice per period, often 1% to 5% per 30 days, so the cost depends entirely on how quickly your customer pays. Some lines of credit price as a weekly fee on the drawn balance rather than an interest rate. Ask for the fee schedule converted to an APR; under California and New York disclosure rules, providers must give you one.

Fees that sit outside the rate

Origination fees (1% to 5% of the loan is common), draw fees, maintenance fees, ACH fees, late fees, wire fees and closing costs all change the real price. The two figures that cut through every product are total dollar cost (everything you repay minus what you receive) and the payment as a share of your monthly free cash flow.

Total repayment

The complete amount expected to be repaid if the agreement runs as written.

Payment pressure

How the amount and daily, weekly, or monthly frequency affect operating cash.

Time and flexibility

The term, draw rules, renewal conditions, prepayment treatment, and unused-line fees.

Security and recourse

Any collateral, lien, personal guarantee, receivables assignment, or other remedy.

Worked example: $50,000 across three products at published market ranges (illustrative, not offers)
Product and scenario	Basis	Payment	Number of payments	Total payback	Cost of capital
Term loan (Lower end)	8.0% APR	$1,567 / month	36	$56,405	$6,405
Term loan (Midpoint)	26.5% APR	$2,028 / month	36	$73,003	$23,003
Term loan (Upper end)	45.0% APR	$2,554 / month	36	$91,927	$41,927
MCA (Lower end)	1.15x	$304 / business day	189	$57,500	$7,500
MCA (Midpoint)	1.32x	$349 / business day	189	$66,000	$16,000
MCA (Upper end)	1.49x	$394 / business day	189	$74,500	$24,500
Line of credit (Lower end)	10.0% APR	$4,396 / month	12	$52,750	$2,750
Line of credit (Midpoint)	35.0% APR	$4,998 / month	12	$59,978	$9,978
Line of credit (Upper end)	60.0% APR	$5,641 / month	12	$67,695	$17,695

Assumptions behind the table: the term loan amortizes over 36 months; the merchant cash advance is repaid over roughly 9 months of business-day remittances (about 189 payments); the line of credit is treated as fully drawn for 12 months, which overstates its cost if you draw less or repay faster. The point of the exercise is the shape, not the decimals: the MCA has the smallest individual payment but the highest total cost relative to its short life, and the term loan spreads a similar cost over three times as long.

Payment estimator

Estimate a payment before you apply

Switch products and amounts to see how the payment, frequency and total payback change. Figures use published market ranges as of September 2026 and are not offers; your actual terms depend on underwriting.

Business term loan: $50,000 at market range
Scenario	Estimated payment	Total payback	Basis
Lower end of range	$1,567 / month	$56,405	8.0% APR
Midpoint	$2,028 / month	$73,003	26.5% APR
Upper end of range	$2,554 / month	$91,927	45.0% APR

Document preparation

Make the story consistent

Sensitive records belong only in the protected application portal when requested. Never email bank statements or place them in a general contact form.

Prepare the file

Document checklist for most applications

Gather these before you apply anywhere. A complete file is the difference between a same-week decision and a month of conditions.

Recent business bank statements with all pages
Accurate monthly revenue and operating-expense picture
Existing loans, advances, liens, and scheduled payments
Business formation, ownership, and identity records
Tax returns or financial statements when the product requires them
Quote, invoice, contract, or budget supporting the requested use
Government ID for every owner with 20% or more ownership
Business EIN letter and, where applicable, licenses or permits

Documents typically requested by product
Product	Typical document set
Merchant cash advance	3–6 months of business bank statements; Government ID; Voided business check; Recent credit-card processing statements if relevant
Business term loan	6 months of bank statements; Most recent business tax return; Profit-and-loss and balance sheet for larger amounts; Government ID
Business line of credit	3–6 months of bank statements; Government ID; Business tax ID
SBA loan	3 years of business and personal tax returns; Year-to-date financial statements; Business plan and use-of-funds detail; Debt schedule; Ownership and entity documents
Equipment financing	Equipment quote or invoice; 3–6 months of bank statements; Government ID; Tax return for larger amounts
Invoice factoring	Accounts-receivable aging report; Sample invoices and contracts; Customer list; Government ID and entity documents
Revenue-based financing	6–12 months of bank statements; Revenue or sales dashboard access; Government ID
Working capital loan	3–6 months of bank statements; Government ID; Voided check

Three habits save time. Download statements directly from the bank as PDFs with every page, including the pages that only show the bank’s legal notices, because funders reject partial statements. Keep a one-page debt schedule current, listing each obligation with its balance, payment and frequency. And write a short, factual note explaining anything unusual: a large transfer, a slow month, a credit event. Volunteering the explanation reads very differently from having it discovered.

Plan the calendar

Timeline by product

Speed is a function of how much verification a product needs. Products underwritten from bank data fund in days; products underwritten from tax returns, collateral and government eligibility take weeks. The estimates below assume a complete file.

Typical time to fund and what extends it
Product	Time to fund	Term	What usually slows it down
Merchant cash advance	Same day to 2 business days	3 – 18 months (remittance schedule, not a fixed term)	Bank-statement verification and a merchant interview; a decision often lands the same day
Business term loan	1 – 3 business days (online lenders)	6 months – 5 years	Tax return and financial statement review; larger amounts may add a site visit or a call with the accountant
Business line of credit	1 – 3 business days to open; draws often same day	Revolving; 6 – 24 month draw periods are typical	Account opening takes a few days; individual draws are often same-day once the line is open
SBA loan	30 – 90 days	Up to 10 years for working capital and equipment; up to 25 years for real estate	Full underwriting, SBA eligibility review, collateral appraisal and closing documents; expect 30 to 90 days
Equipment financing	2 – 5 business days	2 – 7 years, matched to the equipment's useful life	Vendor invoice verification, equipment inspection or title work, and delivery scheduling
Invoice factoring	1 – 3 business days after setup	Per invoice; 30 – 90 day invoice cycles	Customer credit checks and a notice of assignment before the first invoice can be advanced
Revenue-based financing	2 – 7 business days	Until a fixed repayment cap is reached; commonly 6 – 24 months	Connecting sales platforms or providing 6 to 12 months of statements; pricing depends on revenue predictability
Working capital loan	1 – 2 business days	3 – 24 months	Bank login or statement review; funding usually follows the signed agreement within a day

If the need is time-critical, start the fast product and the slow product in parallel rather than waiting for the slow one to fail, and be candid with each provider that you are doing so. Many businesses bridge with a line of credit while an SBA loan closes, then use the SBA proceeds to clear the line.

Before you proceed

Red flags and predatory practices

The small-business funding market is only partially regulated at the federal level; the Truth in Lending Act does not apply to business-purpose credit. That leaves the following practices legal in many states and common everywhere.

Warning sign

Guaranteed approval

No legitimate review can promise approval, a rate, an amount, or a funding date before underwriting and verification.

Warning sign

Pressure without disclosure

Do not sign because of artificial urgency. Read the complete agreement and ask for unclear costs or remedies to be explained.

Warning sign

Missing provider identity

Know whether you are working with a broker, lender, purchaser of receivables, or another provider—and who will fund and service the transaction.

Warning sign

Unsafe document handling

Do not email or place sensitive financial documents into a general contact form. Use a protected document workflow when records are requested.

Warning sign

Upfront fees before any offer

A legitimate funding specialist or lender does not require an application, processing or "insurance" fee before an offer exists. Fees such as origination are deducted from proceeds or paid at closing, and they are written in the agreement.

Warning sign

"Guaranteed approval" or "no underwriting"

Nobody can approve a business without seeing its bank activity. The phrase usually precedes an expensive product, a fee, or an attempt to collect your banking credentials.

Warning sign

Encouraging you to stack

Being pushed to take a second or third advance while the first is still open is a warning sign. Stacking violates most existing agreements and is the most common path to a business failing under daily debits.

Warning sign

Confession of judgment

A confession of judgment lets a provider obtain a court judgment without a lawsuit if it claims a default. New York has banned its use against out-of-state borrowers; treat any agreement containing one as high risk.

Warning sign

Renewal pressure

Offers to "renew" or "refinance" an advance long before it is paid off often mean paying a new fee on a balance that still includes the old fee. Compare the true cost of the new money, not the headline.

Warning sign

Requests for banking credentials by email or text

Read-only bank connections through a recognized aggregator are common; sharing your online banking username and password by email or text is never appropriate.

Warning sign

Vague or missing disclosures

If the total dollar cost, payment schedule and term are not in writing before you sign, you do not have an offer, you have a pitch.

Warning sign

Pressure to sign today

Genuine offers stay open for days. Artificial deadlines are designed to stop you comparing the total cost with another option.

If you have already signed an agreement that contains several of these, the practical options are usually a consolidation through a term loan or line of credit, a negotiated payoff, or, for merchant cash advances that have become unworkable, advice from an attorney who handles commercial finance. Do not respond to a stack of daily debits by adding another advance.

Know your rights

What state disclosure laws mean for borrowers

California: SB 1235 and the DFPI disclosure rules

California passed the first commercial-financing disclosure law in the country (Senate Bill 1235, 2018), with regulations from the Department of Financial Protection and Innovation in force since December 9, 2022. It applies to most commercial financing of $500,000 or less offered to California businesses, including term loans, lines of credit, merchant cash advances, factoring and lease-style products, from non-bank providers.

At the time an offer is extended, the provider must give you a standardized disclosure showing the total amount of funds provided, the total dollar cost of the financing, the term or estimated term, the payment amount, frequency and method, prepayment policies, and the cost expressed as an annualized rate. For sales-based products such as merchant cash advances, that means an estimated APR calculated from your historical receipts. When an intermediary communicates the offer, the same disclosure has to reach you.

New York: the Commercial Finance Disclosure Law

New York’s Commercial Finance Disclosure Law (Financial Services Law Article 8) took effect with Department of Financial Services regulations on August 1, 2023 and reaches further, covering commercial financing of $2.5 million or less. The disclosure is similar: amount financed, finance charge, APR (estimated for sales-based financing), total repayment, term, payment schedule and prepayment charges, with product-specific formats for factoring, open-end lines and lease financing. New York also requires the provider to obtain your signature on the disclosure.

Other states and what it means for you

Utah, Virginia, Georgia, Florida, Connecticut and Kansas have since adopted their own commercial-financing disclosure or registration laws; most require a total-dollar-cost disclosure but not an APR. Wherever you are located, the practical lesson is the same: ask every provider for the total dollar cost, the APR or estimated APR, the payment schedule and the prepayment terms in writing before you sign, and compare offers on those four figures. If a provider operating in California or New York cannot produce the standardized form, that itself is a warning sign.

Candidly

How a funding specialist fits, and how to use one well

AIDBIZ is not a lender. We do not fund transactions from our own balance sheet; we review an inquiry, organize the file, and introduce eligible businesses to funding partners whose criteria fit. We have worked in this market for more than five years across working capital, term loans, lines of credit, SBA, equipment, factoring and revenue-based programs, and we serve businesses in every state.

What a good funding specialist adds is knowledge of which partner will say yes to a given file, at what price, and how quickly, which avoids the cost of blind applications: wasted time, unnecessary credit inquiries, and the demoralizing pattern of declines that push owners toward the most expensive option. What a funding specialist cannot do is change the underlying file. Revenue, deposits, credit and existing obligations are what they are; our job is to present them accurately to the right partner.

AIDBIZ is compensated by funding partners when a transaction funds. That compensation is disclosed on request, and you should ask any intermediary the same question. Checking eligibility with AIDBIZ does not use a hard credit pull; a funding partner may later ask for authorization, and we will tell you when that step arrives.

Questions to ask any funding intermediary

Are you a lender or a broker, and who will actually fund and service the transaction?
How are you compensated, and does it change based on which product I choose?
Will you show me every offer you receive, including the ones you would not recommend?
Does checking eligibility involve a hard credit pull? When would one happen?
Who will see my bank statements and documents, and how are they stored?
Which states’ disclosure forms will I receive, and when?

A broker who answers those six questions clearly is worth working with. An intermediary who deflects any of them is telling you something.

Secure eligibility check

Start with the business basics.

Share the requested amount, revenue range and intended use to begin a confidential, no-obligation review. This first step does not use a hard credit pull, and no documents are collected in this form.

No hard credit pull to apply
Decisions typically in 24–72 hours
5+ years in the industry
Encrypted, private document handling

Frequently asked questions

14 questions owners ask before applying

What is usually required to apply for small-business funding?

Requirements vary, but a business commonly provides identity and formation details, recent bank statements, revenue information, existing obligations, and the intended use of funds. More documented products may request tax returns, financial statements, contracts, or collateral information.

How much business funding can I request?

Base the request on a documented business need and a payment the business can support. The amount available depends on revenue, cash flow, time in business, credit profile, existing obligations, product rules, and underwriting.

How long does approval and funding take?

Timing ranges from fast working-capital reviews to several weeks or longer for SBA-backed or highly documented transactions. A complete, consistent file helps, but no timeline is guaranteed.

Can I qualify with challenged personal credit?

Possibly. Some products weigh business revenue and deposit history heavily, while others have stronger credit requirements. Challenged credit may reduce options or increase cost; it never guarantees approval.

Will the initial inquiry affect my credit score?

The initial AIDBIZ inquiry does not use a hard credit pull. A funding partner may later request permission for a credit check; read the authorization and ask whether it is soft or hard before agreeing.

What is the difference between a loan and revenue-based funding?

A conventional loan generally creates debt with defined repayment terms. Revenue-based structures may calculate remittance using business receipts. Compare the actual agreement, total repayment, payment frequency, and legal structure.

Should I choose the fastest option?

Not automatically. Speed may matter for a time-sensitive need, but it should be weighed against total cost, payment pressure, term, flexibility, and the value created by receiving funds sooner.

Do all products require collateral or a personal guarantee?

No. Requirements vary by product and offer. Equipment financing commonly relies on the financed asset, some products may involve liens or guarantees, and some structures may be unsecured. Review the agreement itself.

How should I compare two offers?

Put both on one sheet: net proceeds, total repayment, payment amount and frequency, term, fees, prepayment rules, security, guarantees, default terms, and estimated effect on monthly cash flow.

What does AIDBIZ do?

AIDBIZ is a team of small-business funding specialists. It organizes an inquiry and may connect an eligible applicant with funding partners. It does not guarantee approval, pricing, timing, or a particular product.

What is a good APR for a small business loan?

It depends on the product and the risk profile. Published market ranges in 2026 put SBA loans near prime plus 2.25% to 4.75%, bank and online term loans roughly 8% to 45% APR, lines of credit 10% to 60% APR and short-term working-capital products higher. Compare offers of the same product type on APR, and different product types on total dollar cost and payment pressure.

How many bank statements do funders want?

Most online products ask for the most recent 3 to 6 months of business bank statements with every page included. Revenue-based financing and larger term loans often want 6 to 12 months; SBA lenders review tax returns and financial statements as well.

Does applying through a funding specialist cost more?

It can, and it can cost less. Funding specialists are compensated by funding partners, which can be built into pricing, but a specialist who knows which partner fits a file can also avoid declines and hard inquiries and surface a lower-cost structure. Ask how the intermediary is paid and whether every offer will be shown to you.

What is stacking and why do funders care?

Stacking means taking a new advance or loan while an existing one is still being repaid, usually without the first provider knowing. It breaches most agreements, pushes total daily or weekly debits past what revenue supports, and is the most common reason businesses end up in default. Funders check bank statements for other providers’ debits and UCC filings for liens.