Last updated: October 2026
Most business loan requirements come down to six things: your personal credit score, time in business, revenue and cash flow, existing debt, collateral or a personal guarantee, and documents that prove all of it. The bar depends on the lender. Banks generally want 2 years in business, $100,000+ in annual revenue and a 660 to 700+ credit score. Online lenders such as OnDeck publish 1 year, $100,000 and 625. SBA 7(a) loans add federal rules: since March 1, 2026, every owner must be a U.S. citizen or national. Revenue-based products such as merchant cash advances weigh bank deposits more than credit. The table below breaks requirements down by loan type.
Business loan requirements by loan type
| Loan type | Credit | Time in business | Revenue | Collateral and guarantee |
|---|---|---|---|---|
| Bank term loan or line | Usually 660 to 700+ (Chase 660; Bank of America above 700 for its unsecured line) | Usually 2+ years | Often $100,000+ a year, and profitability | Often business assets or real estate; personal guarantee from major owners |
| SBA 7(a) | No SBA minimum personal score; must be creditworthy; SBSS business score of 165+ for the small-loan path (up to $350,000) | None set by SBA; startups allowed with a 10% equity injection | Cash flow that shows ability to repay | Not required up to $50,000; above that, available collateral; personal guarantee from 20%+ owners |
| Online term loan | From about 625 (OnDeck) | 1+ year (OnDeck) | $100,000+ a year (OnDeck) | Usually a personal guarantee and a general UCC lien |
| Business line of credit | 625 (Bluevine, OnDeck) to 700+ (banks) | 6 months (Wells Fargo) to 2 years (Chase, Bank of America) | $50,000 to $120,000+ a year, depending on lender | Secured or unsecured; personal guarantee common |
| Equipment financing | Varies widely; for example 640+ for First Citizens guarantors | Often 2 years at banks; some lenders take newer businesses | Enough to cover payments | The equipment itself; down payment may apply |
| Invoice factoring | Your customers' credit matters more than yours | Often flexible | Unpaid B2B or government invoices | The invoices; no other liens on receivables |
| Merchant cash advance (not a loan) | Low minimums; for example Credibly publishes 500 | Often 6+ months | Steady deposits; for example $15,000 a month at Credibly | Sale of future receivables; usually a UCC filing and a performance guarantee |
Figures are each lender's own published minimums, checked in October 2026. A lender can still decline you if you meet them.
The six requirements lenders check
1. Credit score
For most small businesses, the owner's personal credit score drives the decision. Business credit scores matter too, especially for SBA small loans, which use the FICO SBSS score (0 to 300). Under SBA SOP 50 10 8, the minimum SBSS score for the streamlined small-loan path rose from 155 to 165. Before you apply, pull your reports at AnnualCreditReport.com and dispute errors. If your score is under 600, see our guide to funding options for bad credit.
2. Time in business
Time in business is a proxy for stability. Two years is the common bank threshold. One year is typical online. Some lines and revenue-based products accept 6 months. Lenders count from your business formation date or first revenue, so have your formation documents ready.
3. Revenue and cash flow
Banks look at profit and debt service coverage on tax returns. Online and revenue-based lenders read 3 to 6 months of bank statements. In both cases they check:
- average monthly deposits and their trend
- average daily balances and any negative-balance days
- overdraft and NSF fees
- existing loan or advance payments coming out of the account
4. Existing debt
Lenders total your current payments and test whether your cash flow can carry one more. A clear business debt schedule listing every loan, lease and advance speeds this up and avoids surprises.
5. Collateral and personal guarantee
Collateral is a specific asset the lender can claim: real estate, equipment, receivables or inventory. A personal guarantee is your promise to repay if the business cannot. Most small business financing requires a guarantee even when no specific collateral is pledged. The SBA requires one from every owner of 20% or more.
6. Industry and use of funds
Some lenders avoid certain industries, such as gambling, adult businesses, cannabis-related companies or financial firms. Bluevine, for example, lists ineligible industries on its site. The SBA also has a list of ineligible business types and uses of proceeds. Be ready to explain exactly what the money is for.
Business lending criteria: the five Cs
Bank underwriters often frame these requirements as the five Cs of credit:
- Character: your credit history and track record.
- Capacity: cash flow available to repay.
- Capital: money you have invested in the business.
- Collateral: assets securing the loan.
- Conditions: the loan's purpose, your industry and the economy.
SBA loan requirements in 2026
SBA loans have the strictest rules and the lowest cost. Under SOP 50 10 8 (effective June 1, 2025) and SOP 50 10 8.1 (for loans approved from October 1, 2026), the main 7(a) requirements are:
- Eligible business: operating, for-profit, located in the U.S., small under SBA size standards, and not an ineligible type.
- Credit elsewhere: the business cannot get the same credit on reasonable terms from non-government sources.
- Ownership: since March 1, 2026, 100% of direct and indirect owners must be U.S. citizens or U.S. nationals whose principal residence is in the U.S. Lawful permanent residents no longer qualify.
- Equity injection: at least 10% for startups and complete changes of ownership.
- Guarantees: personal guarantees from owners of 20% or more.
- Limits: 7(a) loans up to $5 million; SBA Express up to $500,000; 7(a) small loans up to $350,000.
- Cost: variable rate caps from Prime + 3.0% (over $350,000) to Prime + 6.5% ($50,000 or less). With Prime at 7.00%, that is 10.00% to 13.50%. FY2027 upfront guaranty fees start at 2% of the guaranteed portion for loans of $150,000 or less.
For more detail, read what an SBA loan is.
How much of a down payment do you need for a business loan?
Many working capital loans and lines need no down payment. Where one applies:
- SBA 7(a): a 10% equity injection for startups and full changes of ownership.
- SBA 504 (real estate and major equipment): about 10% from the borrower, with roughly 50% from a bank and 40% from a CDC.
- Equipment financing: anywhere from nothing to a meaningful share of the price, depending on credit and the type of equipment.
Business loan documents checklist
Online lenders and revenue-based funders usually need:
- A short application
- 3 to 6 months of business bank statements
- Government-issued photo ID
- EIN and proof of business registration
- A voided business check or bank verification
Banks and SBA lenders usually add:
- 2 to 3 years of business and personal tax returns, plus a signed IRS Form 4506-C so the lender can pull transcripts
- A year-to-date profit and loss statement and balance sheet
- SBA Form 1919 (Borrower Information Form) and SBA Form 413 (Personal Financial Statement) for each 20%+ owner, for SBA loans
- A debt schedule
- Accounts receivable and payable agings
- Articles of organization or incorporation, operating agreement and business licenses
- Your commercial lease
- A business plan with projections (startups, acquisitions and larger loans)
- Collateral documents, quotes or purchase agreements for what you are buying
How to get a business loan: the application process step by step
- Define the amount and purpose. Lenders approve a use, not a wish. A quote, invoice or budget makes the request concrete.
- Choose the right loan type. Match the term to the use: a line of credit for cash-flow gaps, equipment financing for machinery, a term or SBA loan for long-lived investments. Our business line of credit guide explains when a line beats a loan.
- Check your profile against the table above. Pull your credit, total your monthly deposits and confirm your time in business. Apply only where you meet the published minimums.
- Gather documents. Use the checklist. Missing documents are the most common cause of delays.
- Prequalify and apply. Use soft-pull prequalification where offered. Banks and SBA lenders will do a full application with a hard pull.
- Underwriting. The lender verifies revenue, credit, tax transcripts and liens, and may ask follow-up questions. Answer quickly.
- Review the offer. Compare APR or total payback in dollars, the payment schedule, fees, prepayment terms and any collateral or guarantee.
- Close and fund. Sign, satisfy closing conditions such as insurance or lien filings, and receive the funds.
Timelines vary: online lenders can decide in days, while bank and SBA loans commonly take weeks.
Frequently asked questions
How many years in business do you need for a business loan?
Usually 2 years for a bank, 1 year for most online lenders and 6 months for some lines of credit and revenue-based products. The SBA sets no minimum, but startups need a 10% equity injection and a solid plan.
Can I get a business loan as a sole proprietor?
Yes, from many lenders, but some exclude sole proprietors. Bluevine's line of credit, for example, is for corporations and LLCs. A separate business bank account helps in every case.
What is a UCC filing?
It is a public notice that a lender has a security interest in business assets. Most online loans, lines and merchant cash advances include one. It affects your ability to take on more financing, so ask what each filing covers.
Can I get a business loan if I owe taxes?
It is harder. Tax liens are a major red flag. Some lenders will proceed if you are on a current IRS payment plan and the balance is small relative to revenue. SBA lenders also check for delinquent federal debt. Disclose it up front.
What if I do not meet loan requirements?
Products that rely on other strengths may fit: invoice factoring if you bill other businesses, equipment financing for a specific purchase, or revenue-based financing such as a merchant cash advance. An MCA is not a loan. It is a purchase of future receivables, and it usually costs far more than a loan.
Checking several lenders' requirements at once
Every lender in this guide sets its own requirements, and you will not know which ones you meet until you apply. FSE is an independent commercial finance brokerage working with 50+ lending partners across working capital, lines of credit, equipment financing, real estate-backed funding and merchant cash advances. One application lets us compare what you may qualify for. Our application asks for at least one year in business and $10,000+ in monthly revenue. Approval and terms depend on each lender. Start a no-obligation application.
Sources
- SBA: 7(a) terms, conditions and eligibility; 7(a) loans; SBA Form 1919; SBA Form 413
- Citizenship rule: Compliance Alliance summary of the SBA procedural notice
- FY2027 SBA fees: NAGGL
- SBSS minimum under SOP 50 10 8: Grasshopper Bank
- Prime rate: Federal Reserve H.15
- OnDeck qualifications; Bluevine line of credit; Chase business line of credit; Bank of America unsecured line; Wells Fargo BusinessLine
- Credibly; FundThrough; First Citizens equipment finance
- AnnualCreditReport.com
Lender details were checked in October 2026 and change often; confirm terms with each lender. Inclusion is not an endorsement and does not mean a lender is part of FSE's network.