Where to get money
Where to get a business loan: what you can actually qualify for
One requirement matters more than any other: you have to have a real business with revenue coming in. Here is what is available once you do, how fast each option funds, and how to pick the right one.
Most articles about this send you on a tour of the entire lending industry and leave you to figure it out. Here is the short version instead.
There is one thing that decides almost everything: do you have a business with money coming through it? If you do, you have real options, and they are better than most owners think. If you do not yet, no amount of shopping around will change the answer.
What you need to qualify
- A real, operating business. An entity, a business bank account and revenue running through it.
- Deposits a funder can see. Bank statements tell the story. Consistency matters more than perfection.
- Time in business. More is better, but this is far less of a wall than it used to be.
- Credit that is workable. It matters for the cheapest products and matters much less for revenue-based ones.
Notice what is not on that list: a perfect credit score, collateral, or two years of audited financials. Those are bank requirements, and a bank is only one of the doors.
What you can get
These are the products worth knowing about, roughly from the longest and cheapest to the fastest.
| What it is | Best for | How fast |
|---|---|---|
| Term loan, including longer traditional structures out to about five years | A planned investment you will pay back over time: expansion, a build-out, a big purchase | Longer |
| Business line of credit | Uneven cash flow. Draw what you need, pay for what you use | Fast to set up, instant to draw |
| Working capital | Payroll, inventory, seasonal gaps, taking on a bigger job | Often days |
| Equipment financing | Trucks, machinery, kitchen and medical equipment. The equipment secures it | Days to a couple of weeks |
| Invoice factoring | You bill other businesses and wait 30 to 90 days to get paid | Often days |
| Revenue-based financing | Strong deposits, shorter credit history. Fixed daily or weekly payments | Often days |
| Merchant cash advance | Strong card or bank sales and you need money now | Often within days |
How to pick
| Your situation | Start with |
|---|---|
| Planned project, you can wait, you want the longest term | A term loan |
| Cash flow swings month to month | A line of credit |
| Steady revenue and you need money in days | Working capital or revenue-based financing |
| Credit is rough but deposits are consistent | Revenue-based financing or a merchant cash advance |
| Buying a truck, a machine or equipment | Equipment financing |
| Customers owe you and you need the money now | Invoice factoring |
One application, not twenty
The worst thing an owner can do is fire off applications everywhere at once. You get a flood of broker calls, several credit pulls in a short window, and a pile of offers that are hard to compare.
Go to one funder that actually offers the full range, let a real underwriter look at your file once, and have the right product matched to your situation. Then read the terms before you sign: the total payback, the payment schedule, and whether there is a discount for paying it off early.
Questions owners ask
What do I need to qualify for a business loan?
An operating business with revenue running through a business bank account, and bank statements that show it. Time in business and credit both help, and they matter most for the longest and cheapest products. Revenue-based options weigh your deposits far more heavily than your score.
Can I get a business loan with bad credit?
Often yes, if the revenue is there. Revenue-based financing and merchant cash advances are underwritten mainly on deposits and sales rather than credit history. See business loans with bad credit.
How long can a business loan run?
It depends on the product. Term loans can run out to roughly five years for the right file. Working capital, revenue-based financing and advances are much shorter, usually months rather than years, which is part of why they fund so quickly.
Should I apply to a lot of lenders at once?
No. Applying everywhere means broker calls and several hard credit checks in a short time, which can hurt your score. Start with one funder you trust that offers several products, so a single application can be matched to the right one.
How fast can I actually get funded?
Working capital, revenue-based financing, factoring and advances commonly fund in days once the file is complete. Equipment financing takes days to a couple of weeks. Longer term loans take longer, because the underwriting is deeper.
Related
All business funding options › · Calculators ›
General information, not financial or legal advice. Terms vary by lender and business.
One application, matched to the right product, beats twenty applications and twenty phone calls. Merchant Fund Express offers the full range in one place and underwrites in house, so a single file gets looked at properly.
Funding subject to approval.