Small Business Financing FAQ

Requirements vary by loan type:

• SBA 7(a) Loans: 680+ personal (FICO SBSS 160+ recommended)
• Traditional Bank Loans: 680+ personal credit
• Online Term Loans: 600–640+ depending on lender
• Equipment Financing: 620+ (equipment is collateral)
• Merchant Cash Advance: No minimum — based on daily card volume
• Invoice Factoring: No minimum — based on your customers’ creditworthiness
• Microloans (CDFI/SBA): 580+ with compensating factors

Source: Federal Reserve Small Business Credit Survey 2023; SBA SOP 50 10 7.

• SBA Loans: Typically 2+ years in business
• Bank/Credit Union Loans: 2+ years
• Online Term Loans: 6–12 months minimum
• MCAs: 3–6 months of credit card processing history
• Invoice Factoring: Can start with your first invoice
• Startup Loans: From day 1 — see our startup business loans guide

• SBA Loans: No SBA minimum, but lenders typically require $100K+
• Online Lenders: $100K–$250K+ annual revenue
• MCAs: $50K–$100K+ in annual card sales
• Invoice Factoring: Any amount — based on outstanding B2B receivables

The Federal Reserve SBCS 2023 found median revenue of $500K for approved applicants vs. $225K for denied applicants.

Business Term Loan: Lump sum disbursed at once; fixed monthly payments; predictable total cost. Best for specific purchases (equipment, renovation, acquisition).

Business Line of Credit: Revolving credit facility — draw what you need, repay, draw again. Only pay interest on what you draw. Best for ongoing working capital, payroll bridges, and seasonal needs.

Most financial advisors recommend having both: a term loan for major investments and a line of credit for operational flexibility.

• MCA: 2–24 hours from approval to funding
• Invoice Factoring: 24–48 hours
• Online Term Loan: 1–7 business days
• Equipment Financing: 2–7 business days
• SBA Express (to $500K): 36-hour approval; 10–14 days to fund
• SBA 7(a) Standard: 60–90 days
• Bank Term Loan: 2–8 weeks

• All Loans: Government-issued ID, business license/EIN, 3–6 months business bank statements
• SBA/Bank Loans: + 2 years business tax returns, 2 years personal tax returns, P&L and balance sheet, business plan if under 2 years old
• Online Lenders: + 3–12 months bank statements, basic financial overview
• MCAs: Bank statements + credit card processing statements only
• Invoice Factoring: Copies of open invoices + aging report

Soft inquiries (no credit impact): Pre-qualification checks, most MCA providers, invoice factoring, and our partner’s initial qualification screening.

Hard inquiries (−3–5 points, 2 years on report): Formal applications for traditional bank loans, SBA loans, and most online term loans.

SBLT’s partner network performs a soft pull to show your options — no credit impact until you proceed with a specific lender offer.

Yes — LLC status does not disqualify you from any loan type. Most loans require a personal guarantee from all owners with 20%+ ownership, regardless of entity type (LLC, S-Corp, C-Corp, sole proprietor). The LLC provides liability protection in most situations except where you have signed a personal guarantee on that specific debt.

DSCR (Debt Service Coverage Ratio) = Net Operating Income ÷ Total Annual Debt Service. It measures whether your business generates enough income to cover all loan payments. Most lenders require DSCR of 1.25+ (every $1 of debt service is covered by $1.25 of income). SBA 7(a) loans require 1.25 minimum. Alternative lenders and MCAs may not check DSCR at all — they focus on revenue volume instead.