Apply for a Small and Medium Business Loans It may seem daunting. In 2024, over 70% of discouraged borrowers who didn’t apply for funding thought they were not eligible based on business finances, and 25% thought the requirements for lenders were too strict, according to a 2025 report on employer companies.
All lenders have their own requirements, but understanding the general requirements can help accelerate the application process, save time and improve the likelihood of approval. Be familiar with the general business loan requirements to prepare your small business loan application.
1. Annual revenue requirements
Although revenue requirements vary by lender, most people want to ensure proper cash flow after other financial obligations to process the new loan. It is more likely that online lenders have lower annual revenue requirements than traditional lenders like banks. For reference, Ibusiness Funding, an online lender, only has an annual revenue requirement of $50,000, but both Bank of America and Wells Fargo want to see at least $100,000 in annual revenue.
If you are unable to meet your annual or monthly revenue requirements with your bank or online lender, you can consider other things Alternative loan Options such as financing your bills, Invoice factoring or Merchant Cash Advanced (MCAS). Invoice funding and factoring secures loans using unpaid customer invoices, while MCA companies actually buy a portion of their future sales revenue in exchange for lump sum cash.
These alternative options may be easier to qualify without a minimum revenue requirement, but they are more expensive than traditional term loans.
2. Business Plan
a Business Plan It is essential for many business loan applications. Lenders will want to understand what your business is doing, how it makes money, and how it continues to succeed. Most importantly, your lender will want to know that your plan is a fundraising plan.
You can work with a business advisor or a Small and Medium Enterprise Development Center (SBDC) To shape your business plan. You should also include each owner’s resume and how they contribute to the success of your business.
Your business plan should include:
- executive summary
- Company description
- Market Analysis
- Organization and management information
- Service or product line description
- Marketing and Sales Information
- Funding Request
- Financial forecast
However, only some lenders require a business plan. Small and non-traditional lenders may need to prove that they have enough revenue and cash flow to process the loan, no matter how your business plans to use it.
3. Credit score requirements
Most small business lenders will check you out Personal Credit Score When applying for a business loan. In 2024, low-credit risk borrowers were nearly twice as likely to be approved for funding in banks and financial companies, according to Federal Reserve data.
Banks and credit unions typically require a personal credit score of 670 or higher for business loans. For reference, Bank of America requires a minimum personal credit score of 700, with Wells Fargo’s requirement of 680. Bad Credit Business Loan. For example, Fora Financial offers business loans to borrowers with a low credit score of 570.
Your business score can be important, especially if you’re making a lot of demands or have been in business for a long time. Similar to personal credit scores Business Credit Score Express your business’s credibility. Business Credit Reports may contain information about employee counts, account information, past payment history, and amounts related to obligations. The better your business’s credit score, the more likely it is to your business, potentially a better interest rate.
4. Personal financial history
The personal finances of each owner play a role in his ability to qualify for small business loans, especially if he is launching a startup. Business lenders often ask you to look at your personal bank statement and tax returns, allowing you to manage your small business loans responsibly. You may also need a Personal guaranteeyou and your co-owner (if any) will personally be held responsible for repaying the borrowed funds if your business is unable to pay.
If your credit is insufficient, business loans may not be able to ensure you are competitive. Similarly, if you have previously received other debts and have failed to pay them off, it may be more difficult to secure funds. If you go bankrupt over the past few years, many lenders will not approve the loan. In these cases, having a history of on-time payments for recent loans will serve as an asset when lenders review your application.
5. Business Requirements Time
Many lenders require that they run the company for at least two years before approving a standard business loan. According to a 2025 report on Fed employers, less than half of businesses under the age of five were approved for fundraising in 2024.
There are a few exceptions to the rules. Professional lender Startup Loan Many have more generous business loan requirements, and they want a six-month business. Additionally, certain loan types, such as equipment loans, may not have minimum time for business requirements.
6. Industry requirements
Lenders can also consider your business industry when evaluating your loan application. Companies with profitable and stable industries are more likely to appeal to lenders.
Conversely, many lenders have a list of industries that they don’t cooperate and can usually be found on their websites. Gambling, adult entertainment, or cannabis is often not suitable for traditional fundraising.
7. Loan proposal
Traditional term loan and Small and Medium Business Management Loanthe proposal is important. A loan proposal is similar to a business plan and may be included in one. It outlines:
- Why do you need funds?
- How to use the loan.
- How you can pay back your loan.
- How it benefits your business.
It’s not a requirement for any kind of loan and not all lenders want to see it. However, if you are ready to apply, you must still be ready.
8. List of other debts and obligations
You need to List your business debts Other financial obligations. This includes other loans you have, Business Credit Cardregular invoice and pay number. Lenders will want to make sure they have enough cash flow to manage new loan payments.
Even if your business is profitable, that doesn’t mean you can handle more debts. The lender will consider you Debt-to-asset ratio When applying. This will let the lender know how much your income is being paid against your current obligations. The higher the number, the more difficult it may be to qualify for a small business loan.
9. Business Documentation
In addition to these eight categories, Other Documents You may be asked to submit it when applying for a business loan.
Conclusion
Every lender has its own business loan requirements. Most commonly, lenders will assess your business’s annual revenue and finances, operating hours, and your personal credit history. However, certain requirements may vary depending on the type of loan and lender. We recommend that you prepare information that is likely to be asked to submit in advance to facilitate the application process and increase the likelihood of approval. You can then compare lenders to find lenders that meet the needs of your business.
