A lender reviewing your request is answering one question: can this business take on this payment and still run comfortably? Your credit score is part of the answer. So are your deposits, your time in business, the payments you already make and what the money is for.
Your history is set by the time you apply, but how clearly it’s presented is up to you. That shapes how quickly a lender can answer, and how large an offer it can make.
What lenders weigh
Revenue and deposits
Most online lenders read your business bank statements before anything else, because deposits show what the business brings in. They look at the monthly total, how steady it is and which way it’s heading. Many look for yearly revenue in the low six figures or more, though the floor varies by product and by company.
Time in business
Time in business shows the business has worked through more than one season. Many online lenders start at around six months to a year. Banks often look for two years or more.
Credit
Your personal credit matters most while the business is young, and the business’s own file counts for more as it builds a history. Many lenders consider personal scores from the 500s for working capital, while banks often look for scores in the high 600s or above. Recent late payments weigh more than old ones. See how to check your business and personal credit.
The payments you already make
A lender adds up what your existing financing takes from each month’s revenue. If a large share of your deposits already goes to other payments, a new offer tends to come back smaller, or with a suggestion to consolidate first.
How the account is run
Overdrafts, negative balances and returned payments all show up on statements. One or two in a year reads differently from a few every month.
What the money is for
A purpose that earns or saves money is easy to understand: equipment that adds capacity, stock for an order you’ve already won, a second location with a signed lease. Say what it’s for in a sentence or two.
Collateral, where it applies
For secured financing, the asset’s value counts too, and with equipment financing the machine can carry much of the decision. See secured vs. unsecured business loans.
Read your statements the way a lender does
Before you apply, pull your last four months of business bank statements and read them as an outsider would. Five numbers tell most of the story:
- Your average monthly deposits, leaving out transfers between your own accounts and any loan money that came in
- Your lowest balance in each month
- How many days the account ran negative
- What you pay each month on existing financing
- Any single deposit much larger than the rest
Those five numbers are where many reviews start. Knowing them before you apply tells you what size of request your statements support, and which items need a sentence of explanation.
How to present a strong request
- Know the amount and what it buys. A request to install a second walk-in cooler reads more clearly than a request for as much as possible.
- Ask for an amount your revenue supports. Many lenders size offers to a share of your monthly deposits, and a request far above that tends to come back smaller.
- Match the product to the purpose. A machine suits equipment financing, recurring gaps suit a line of credit, and customers who pay on terms suit invoice financing.
- Send complete statements, downloaded from your bank, with every page of every month.
- Keep the business’s legal name, address and owner details the same on every document.
- Explain what the statements can’t. A seasonal dip, a one-time deposit or a large contract that just started takes two sentences to explain up front, and far longer once a lender has flagged it.
- List your existing financing honestly, with balances and payments. It shows up on your statements either way.
- Apply after strong months, while they’re on your recent statements, and before the need is urgent.
- Stay easy to reach while the request is open.
Common reasons for a no, and what changes them
- Too little time in business. Financing that leans on something besides your history can fit sooner, such as equipment financing, where the machine secures it, or invoice financing, where your customers’ credit carries weight.
- Heavy existing payments. Paying down a balance, or asking about consolidating it, makes room for the next request.
- Recent overdrafts. A few clean months on your statements changes the picture.
- An open tax lien or judgment. A written payment plan, and proof you’re current on it, often answers the question.
- A request larger than the revenue supports. A smaller first amount, repaid on time, builds the history for a larger one.
Lenders weigh all of this differently, and a request one turns down may suit another. Ask what would change the answer, and when to come back.
What to have ready
- Your last few months of business bank statements; most lenders ask for at least three or four
- A photo ID for each owner
- The business’s legal name, start date and yearly revenue
- A short list of current financing, with balances and payments
- For larger amounts, recent tax returns or financial statements
- For equipment, a quote from the seller
If your deadline is close, how long business funding takes shows what sets the pace for each kind of financing.
When an offer arrives
Compare every offer on the same numbers, in dollars: what you receive, what each payment is and how often it’s taken, and the total you repay. Then ask whether paying early saves money, which assets are pledged, and who signs a guarantee. Two offers for the same amount can differ a great deal on those last three points.
Start with the product that fits
Compare the options on the financing page to see which one fits your purpose, then apply from that product’s page. If your score is still catching up, see financing that weighs your revenue. Applying takes a few minutes and won’t affect your credit score. We’ll review your application and match you with the options that fit.
