Business loan requirements depend on the kind of financing you apply for, but nearly every lender checks the same few things: how long the business has been operating, how much revenue comes in and how steadily, the owner's credit, what the business already owes, and what backs the loan if payments stop. Banks and SBA lenders ask for the most paperwork, usually tax returns, a personal financial statement and a list of existing debts, and their decisions take weeks. Revenue-based funders mostly read your last four months of business bank statements and can make an offer within a day or two.
What lenders look at for a business loan
Underneath the product names, every underwriter is asking whether the money will come back on schedule. The SBA puts it plainly in its 7(a) eligibility rules, which require a business to "be creditworthy and demonstrate a reasonable ability to repay the loan." Private lenders and funders use different methods to answer that question, but they look at the same raw material.
- Cash flow comes first, because payments are made from it. Lenders read deposits, recurring expenses and the balance the account holds through the month to judge whether a new payment fits.
- Time in business shows whether the revenue has lasted through slow seasons and bad months, so a longer history makes the numbers more believable.
- Credit history tells the lender how the owner, and the business if it has its own credit file, has handled past obligations.
- Existing debt matters as much as revenue, since a business already paying two loans or advances has less room for a third.
- Collateral or a guarantee gives the lender a second way to be repaid. In the Federal Reserve's 2026 Small Business Credit Survey report on employer firms, 59% of firms with debt had secured it with a personal guarantee, 51% with business assets and 38% with the owner's personal assets.
- The use of funds matters too, because a specific purpose with a clear payback, such as a truck that lets you take more loads, is easier to underwrite than a general request for cash.
Thresholds vary widely from one funder to the next, and credit matters more to some than to others. Among the funders we work with, the businesses that receive offers generally have at least a year in business and about $20,000 a month in deposits. Treat that as a rough guide to where most offers land. If you're not there yet, apply anyway. Some funders work with newer or smaller businesses, and we'll tell you what's realistic.
How much credit and time in business change your odds
The Federal Reserve's survey, fielded from September to November 2025, asked thousands of small employers how their financing applications turned out. It sorts firms by credit risk: low risk means a personal score of 720 or higher (or a business score of 80 to 100), medium risk means a personal score of 620 to 719, and high risk means a personal score below 620. At every type of lender, low-risk applicants were approved more often. Medium- and high-risk applicants were still at least partly approved most of the time, from 54% at large banks to 70% at online lenders.
Age and size follow the same pattern. In the same report, 48% of applicants in business five years or less were fully approved for what they asked for, compared with 51% of firms aged six to 20 years and 63% of firms in business 21 years or longer. By revenue, 37% of applicants with less than $100,000 in annual revenue were fully approved, against 61% of firms with $1 million to $10 million. Among owners who didn't apply because they expected a denial, 63% pointed to weak business financials, and 8% said they were missing documentation.
Partial approvals are common at every age and score, so it helps to know the smallest amount that would still solve your problem before you apply.
Business loan requirements by type of financing
The product you choose decides which of those factors carries the most weight. The Fed's survey shows how differently products behave: 11% of applicants for auto or equipment loans were denied, 12% for merchant cash advances, 24% for business lines of credit, 28% for business loans and 40% for SBA loans or lines of credit. Those gaps reflect what each lender is relying on to get repaid.
SBA and bank loans
SBA loans are made by private lenders and backed by an SBA guarantee, and they have the longest list of requirements. To be eligible for a 7(a) loan, the SBA says a business must operate for profit in the U.S., be small under SBA size standards, not be a type of business the program excludes, be unable to get the credit on reasonable terms from non-government sources, and be creditworthy with a reasonable ability to repay. The SBA's loans overview adds that eligibility is based on what the business does to earn its income, the character of its ownership and where it operates, and that some SBA loans need no collateral.
On the paperwork side, the SBA's Lender Match checklist tells applicants to come ready with the amount and use of funds, their credit history, financial projections showing how the loan will be repaid, and details of any collateral, which it describes as a home, car, inventory or other property. A business plan is expected for startup funding. Every owner of 20% or more, plus anyone guaranteeing the loan, completes a personal financial statement on SBA Form 413, which the SBA uses to judge repayment ability and creditworthiness. The borrower information form (Form 1919) collects details on the owners, the loan request and the business's existing debts, and has the applicant certify that it is current on federal, state and local taxes. Lenders typically ask for business and personal tax returns alongside these forms, and the SBA notes that the exact list depends on the size of the loan and how the lender processes it.
Conventional bank loans ask for a similar package without the SBA forms. Either way, expect the process to take weeks rather than days. Our page on SBA and bank loans covers what we place and how long it usually runs.
Business lines of credit
A line of credit lets you draw what you need up to a limit and pay interest or fees only on the drawn balance, so lenders care most about whether your deposits can cover repayment on a full draw. Bank lines usually come with the same financial statements and tax returns as a term loan. Many other line providers decide from bank statements, credit and time in business. Lines we place go up to $250,000, with offers often arriving within a day and repayment weekly or monthly on what you've drawn. Our business line of credit guide covers draws and costs, and the line of credit page shows how it works through us.
Equipment financing
With equipment financing, the machine, truck or oven you're buying serves as the collateral, and auto or equipment loans had the lowest denial rate in the Fed's data. The lender wants a quote or invoice from the seller showing the make, model, condition and price, and then looks at whether your cash flow covers the payment. Because the equipment holds value the lender can recover, a younger business or a thinner credit file is often less of an obstacle here than it would be for an unsecured loan. Offers typically come back in one to two business days. Our explainer on how equipment financing works covers leases, down payments and terms, and the equipment financing page lists what we place.
Revenue-based financing
Revenue-based financing (a merchant cash advance) is the product with the shortest list of requirements. A funder buys a share of your future sales and collects it as a percentage of daily or weekly revenue, so the decision rests mostly on your recent deposits. To get matched you fill out a short application and share four months of business bank statements, either uploaded or through a read-only bank connection. Amounts run from $5,000 to $2,000,000, collateral is usually not required, and funding typically follows within one to two business days. Our guide on how to qualify for a merchant cash advance goes through funder requirements in depth, and the revenue-based financing page shows how repayment works.
Business loan documents required, product by product
The table shows what each type of lender typically asks for. Practice varies, and the lender's own checklist always wins.
| Document | SBA or bank loan | Line of credit | Equipment financing | Revenue-based financing |
|---|---|---|---|---|
| Application form | Yes, plus SBA forms for SBA loans | Yes | Yes | Yes, a short one |
| Business bank statements | Usually | Yes | Usually | Yes, the last four months |
| Business and personal tax returns | Yes | Often at banks, sometimes elsewhere | Sometimes, for larger amounts | Rarely |
| Personal financial statement | Yes (Form 413 for SBA) | Sometimes | Sometimes | Rarely |
| Schedule of existing business debt | Yes | Sometimes | Sometimes | Rarely, since debits show on the statements |
| Profit and loss statement and balance sheet | Yes | Often at banks | Sometimes | Rarely |
| Business plan and projections | For startups and some SBA loans | Rarely | Rarely | No |
| Quote or invoice for the purchase | If buying assets | No | Yes | No |
| Owner ID and ownership details | Yes | Yes | Yes | Yes |
| Collateral details | Often | Sometimes | The equipment itself | Usually none |
How to qualify for a business loan when your file has gaps
Four gaps come up again and again, and each one has a practical fix.
Less than a year or two in business
Banks lean heavily on history, so a young business usually does better with products that rely on something else. Equipment financing leans on the value of the asset. Revenue-based funders lean on recent deposits, and a few months of strong, steady sales can carry a file that a bank would turn down for age alone. For startup funding, the SBA says a business plan is expected, and its loans page notes that even owners with bad credit may qualify for startup funding through SBA programs. In the meantime, run every sale through one business account, because those statements become your track record.
Thin or damaged credit
Start by reading your own reports. The Consumer Financial Protection Bureau explains that a credit report records your credit activity, including payment history and the status of your accounts, that most people have more than one report, and that creditors don't have to report to every credit bureau. That last point is why the same owner can look different to two lenders. Get errors corrected, bring any late accounts current, and pay revolving balances down before you apply. If your score sits in the Fed's medium- or high-risk range, lean toward funders that weigh deposits more heavily than the score, since their offers are sized to your revenue and priced in a factor rate you can see in dollars before you sign.
Existing advances or loans on your statements
Funders see every fixed debit on your bank statements, and a business already paying two or three advances has less room for another payment. Before you apply, list each balance, payment and payoff date. Often the better request is to combine them, where a new funder pays the existing funders directly and you make one weekly or monthly payment over a longer term, which frees up daily cash. Our consolidation page explains how the new payment and total payback are set, and we lay both out in dollars next to what you pay now.
Statements that tell a messy story
Overdrafts, negative days, large unexplained transfers and personal spending in the business account all make an underwriter cautious. Past months can still be explained. If a slow month came from a one-off event such as a lost contract, say so in your application, and flag any large deposit that was a loan or an owner contribution so nobody counts it as sales. Then keep the next few months clean, with a balance that stays positive.
What applying through Today Capital Group looks like
Today Capital Group is a funding broker, and the funders in our network make the lending decisions. You complete one short application and share four months of business bank statements, and we send your file to the funders in our network whose requirements fit your business. Getting matched doesn't need a hard credit pull, because most funders prequalify from bank statements and a soft pull. A funder may run a hard pull in final underwriting, and you'll know before it happens. There's nothing to pay to apply or to see offers, and no obligation to accept one. Offers come back side by side, we go through them with you before anything is signed, and most applicants are funded within one to two business days of choosing an offer. Our walkthrough of the steps from application to funded shows each stage and what happens at it.
Pull your last four months of business bank statements, then apply or call us at (818) 351-0225 to talk through which product fits your file.
Frequently asked questions
What are the basic requirements for a business loan?
Most lenders want an operating business with steady revenue running through a business bank account, an owner credit history they can review, and enough room in cash flow for a new payment. Some products also call for collateral or a personal guarantee. SBA loans add eligibility rules of their own, such as being a for-profit U.S. business that meets SBA size standards and can show a reasonable ability to repay.
What do lenders look at for a business loan?
Lenders look at cash flow and deposit history, time in business, the owner's credit (plus business credit where it exists), existing debts and advances, collateral, and what the money will be used for. Each product weighs those differently. Banks lean on credit and history, while revenue-based funders lean on your recent bank statements.
What documents are required for a business loan?
Revenue-based funders typically need a short application and the last four months of business bank statements, and equipment lenders add a quote or invoice for the equipment. Banks and SBA lenders usually ask for business and personal tax returns, financial statements, a personal financial statement (SBA Form 413 for SBA loans) and a schedule of existing debt. A business plan is expected for startup funding.
How long do you need to be in business to get a business loan?
There's no single rule, because every lender sets its own minimum. In the Federal Reserve's survey, 48% of applicants in business five years or less were fully approved, compared with 63% of firms in business 21 years or more. Among the funders we work with, offers generally go to businesses with at least a year of history, though some funders work with newer businesses too.
Can I qualify for a business loan with bad credit?
Often you can, because a lower score narrows your options rather than ending them. In the Federal Reserve's survey, medium- and high-risk applicants were still at least partly approved 54% of the time at large banks and 70% of the time at online lenders. Equipment financing and revenue-based financing are usually the most open to thinner credit files.
