What are the basic requirements for a small business loan?

Basic requirements vary significantly by loan type. For merchant cash advances: 500+ FICO, $4,000-$6,000+/month in deposits, 6+ months in business, 6 consecutive months of BUSINESS bank statements. For bank term loans: 680+ FICO, 2+ years in business, $250,000+ annual revenue, financial statements, business plan. For SBA 7(a) loans: 650+ FICO, 2+ years in business, demonstrate ability to repay, may require collateral. The fastest and easiest to qualify for: MCA and online short-term loans. The hardest and cheapest: SBA and bank loans.

How much revenue do I need for a small business loan?

Revenue requirements depend on loan type: MCA and revenue-based loans: $4,000-$6,000+/month minimum in bank deposits. Online term loans: $10,000-$25,000/month. Business lines of credit: $50,000+/year in revenue. Bank term loans: typically $250,000+/year. SBA 7(a): no minimum revenue requirement, but cash flow must demonstrate ability to repay. Equipment financing: no strict minimum, but payment must be serviceable from cash flow.

What documents do I need for a small business loan?

Documents required by loan type: MCA (minimum, to submit): signed application plus 6 consecutive months of BUSINESS bank statements (personal statements are not accepted); government ID and a voided check are collected after approval, at signing, never required upfront. Online lenders: similar to MCA plus may request business tax returns or P&L. Banks and SBA: 2-3 years of business and personal tax returns, profit & loss statements, balance sheet, business plan, accounts receivable aging, lease agreements, entity documents. The more complex the loan and the lower the rate, the more documentation is required.

Do I need collateral for a small business loan?

Collateral requirements vary by loan type: MCA: no real property collateral; UCC-1 lien on business assets only. Revenue-based financing: same as MCA. Equipment financing: the equipment itself is the collateral. SBA loans under $25,000: no collateral required. SBA loans over $25,000: collateral required if available. Bank term loans: typically require business assets and sometimes personal real estate. Business line of credit (bank): often requires collateral for higher limits. If you don't have collateral, MCA and revenue-based financing are the primary options.

How long do I need to be in business?

Time in business requirements: MCA: 6 months minimum, 12+ preferred. Online short-term loans: 6-12 months. Online business lines of credit: 12+ months. Bank term loans: 2+ years. SBA 7(a): 2+ years for most lenders. Brand new businesses (under 6 months) face very limited options: personal loans, credit cards, equipment financing if purchasing specific equipment, or SBA Microloan program (up to $50,000) through non-profit lenders. Startups with no operating history cannot qualify for most business loans.

Small Business Loan Requirements: What You Need to Qualify

Direct Answer

Requirements for a small business loan depend on the loan type. MCA (fastest): 500+ FICO, $4,000-$6,000+/month deposits, 6+ months in business, 6 consecutive months of BUSINESS bank statements. Bank loans: 680+ FICO, 2+ years in business, $250,000+ annual revenue, full financial statements. SBA: 650+ FICO, 2+ years, collateral if available. The lower the rate, the more documentation and qualification required. There is no cheap and easy option.

Contents

Requirements by Loan Type
Documents Required by Loan Type
Collateral Requirements
FAQ

Requirements by Loan Type

Loan Type	Min. FICO	Min. Revenue	Time in Business	Collateral	Speed	Difficulty
Merchant Cash Advance	500	$4K-$6K+/mo deposits	6+ months	None (UCC-1)	Provider-Set	Easy
Revenue-Based Financing	500	$4K-$6K+/mo deposits	6+ months	None	Provider-Set	Easy
Invoice Factoring	500+*	Outstanding B2B invoices	6+ months	Invoices	Provider-Set	Easy
Equipment Financing	575	Must service payment	12+ months	Equipment only	Provider-Set	Moderate
Online Term Loan	600	$10K/mo	12+ months	Sometimes	Provider-Set	Moderate
Business LOC (online)	600	$50K/yr	12+ months	Sometimes	Provider-Set	Moderate
Business LOC (bank)	680	$250K/yr	2+ years	Often required	2-4 weeks	Hard
Bank Term Loan	680	$250K+/yr	2+ years	Often required	3-8 weeks	Hard
SBA 7(a) Loan	650-680	Able to repay from CF	2+ years	Required if available	30-90 days	Hard
SBA Microloan	575+	None strict	Startups OK	Sometimes	30-60 days	Moderate

*Invoice factoring: your personal credit matters less than your clients' creditworthiness. The factor is advancing against your clients' obligation to pay, not yours.

A driver in work clothes checking a printed docket on a clipboard beside a van loaded with boxes and paper bags. — Every requirement on this page is something you can assemble yourself before you apply.

Documents Required by Loan Type

Easiest

Merchant Cash Advance / Revenue-Based Financing

Required to Submit

Signed one-page application
6 consecutive months of complete BUSINESS bank statements, all pages, PDF (personal statements are not accepted)
Basic business info: legal name, EIN, address, business type
Business license (some industries only)

Collected After Approval, at Signing

Government-issued ID (all owners 20%+)
Voided business check or bank letter

Moderate

Online Term Loan / Online Business Line of Credit

6 consecutive months of BUSINESS bank statements (personal statements are not accepted)
Voided business check
Government-issued ID
1-2 years of business tax returns
Profit & loss statement (sometimes)
Business license or articles of incorporation

Most Rigorous

Bank Term Loan / SBA 7(a) Loan

2-3 years of business tax returns (all schedules)
2-3 years of personal tax returns (all owners 20%+)
Profit & loss statement (current year + 2 years prior)
Balance sheet (current)
Business plan with financial projections (SBA sometimes requires)
Accounts receivable and payable aging reports
Business lease or ownership documents
Entity documents: articles of incorporation, operating agreement
Collateral documentation (if applicable)
Personal financial statement
Debt schedule (existing business loans)
Industry-specific licenses

Staff working behind a bakery service counter, taking an order at the point of sale terminal. — Consistent deposits from trading like this carry more weight than any single document.

Collateral Requirements

Collateral is an asset pledged to the lender that they can claim if you default. Requirements depend on loan type:

MCA and revenue-based financing: No real property collateral. Lender files a UCC-1 lien on business assets (accounts receivable, inventory, equipment) as a security interest, but this is not a mortgage on property.
Equipment financing: The equipment itself is collateral. If you don't pay, the lender repossesses the equipment. Your home and other assets are typically not at risk.
Invoice factoring: The invoices are the collateral. The factor advances against your clients' obligation to pay you.
SBA loans under $25,000: No collateral required.
SBA loans $25,000-$350,000: Collateral required if available. Lender must take available collateral but cannot deny a loan solely because collateral is insufficient.
SBA loans over $350,000: Must be fully collateralized if possible. Personal real estate may be required.
Bank term loans: Typically require business assets and often personal real estate for larger amounts.

Meet the MCA Requirements? Apply Now.

500+ FICO. $4,000-$6,000+/month deposits. 6+ months in business. 6 consecutive months of business bank statements. That's all you need to start.

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Frequently Asked Questions

What are the basic requirements for a small business loan?: Requirements vary by loan type. MCA (easiest): 500+ FICO, $4,000-$6,000+/month deposits, 6+ months in business, 6 consecutive months of BUSINESS bank statements. Bank loans (hardest): 680+ FICO, 2+ years in business, $250,000+ annual revenue, full financial statements, collateral. The fastest and easiest to qualify for are MCA and online revenue-based loans. The hardest and cheapest are SBA and bank loans.

How much revenue do I need for a small business loan?: By loan type: MCA and revenue-based loans require $4,000-$6,000+/month in bank deposits. Online term loans: $10,000-$25,000/month. Business lines of credit: $50,000+/year. Bank term loans: $250,000+/year. SBA 7(a): no strict minimum, cash flow must demonstrate ability to repay the specific loan amount.

What documents do I need?: MCA minimum, to submit: signed application plus 6 consecutive months of BUSINESS bank statements (personal statements are not accepted); government ID and a voided check are collected after approval, at signing, never required upfront. Online lenders: similar to MCA plus may require 1-2 years of tax returns. Banks and SBA: 2-3 years of business and personal tax returns, P&L statements, balance sheet, business plan, debt schedule, entity documents. The simpler the document requirements, the higher the cost of capital.

Do I need collateral for a small business loan?: MCA: no collateral; only a UCC-1 lien on business assets. Equipment financing: the equipment itself. SBA under $25,000: no collateral. SBA over $25,000: collateral required if available. Bank loans: typically require business assets and sometimes personal real estate. If you can't pledge collateral, MCA and revenue-based financing are your primary options.

How long do I need to be in business?: MCA: 6 months minimum, 12+ preferred. Online loans: 6-12 months. Bank loans: 2+ years. SBA: 2+ years for most lenders. Brand-new businesses (under 6 months) have very limited options: personal loans, business credit cards, equipment financing for specific purchases, or SBA Microloan through non-profit lenders.

What documents do I need for a small business loan?: Documents required by loan type: MCA (minimum, to submit): signed application plus 6 consecutive months of BUSINESS bank statements (personal statements are not accepted); government ID and a voided check are collected after approval, at signing, never required upfront. Online lenders: similar to MCA plus may request business tax returns or P&L. Banks and SBA: 2-3 years of business and personal tax returns, profit & loss statements, balance sheet, business plan, accounts receivable aging, lease agreements, entity documents. The more complex the loan and the lower the rate, the more documentation is required.