Business Loan Questions, Answered Plainly

It depends heavily on the loan type. SBA loans typically want a personal credit score in the high 600s or better, traditional bank term loans often want the same, while online lenders and equipment financing can work with scores in the mid-500s because the equipment or a shorter term reduces their risk. There is no single US-wide minimum.

A standard SBA 7(a) loan commonly takes 30 to 90 days from application to funding because it involves both a lender's underwriting and an SBA guarantee review. SBA Express loans move faster, often within a couple of weeks, but come with a lower maximum guarantee percentage. If speed matters more than rate, factor this timeline in early.

Neither is universally better — a line of credit suits recurring or unpredictable expenses because you only pay interest on what you draw, while a term loan suits a single, defined purchase with a known cost. Our guide on lines of credit versus term loans walks through both scenarios with real numbers.

Loan amounts vary by lender and loan type: SBA 7(a) loans go up to $5 million, typical online term loans range from $5,000 to $500,000, and equipment financing is usually capped near the value of the equipment itself. Your revenue, time trading and credit profile determine what you'll actually qualify for within those ranges.

A merchant cash advance is not technically a loan — it's a purchase of a portion of your future sales, repaid through a fixed percentage of daily card revenue rather than a fixed monthly payment. The cost is expressed as a factor rate instead of an APR, and when converted, the effective annual cost is usually far higher than a term loan. Our guide breaks down the true cost side by side.

Some do and some don't. SBA loans generally require collateral when it's available, equipment financing uses the equipment itself as collateral, while many online term loans and lines of credit are unsecured but come with a personal guarantee instead. Unsecured financing usually carries a higher rate to offset the lender's added risk.

Most online lenders want to see at least $5,000 to $10,000 in monthly revenue and six months to a year of trading history, though requirements vary widely by lender and loan type. SBA and bank loans typically expect stronger, more established revenue and at least two years of financials. Our funding readiness calculator gives you a quick read on where you likely stand.

It's harder but not always impossible — equipment financing and revenue-based options like merchant cash advances are more accessible with weaker credit because they lean on other factors like the asset value or daily sales. Expect a materially higher cost of capital in exchange for that accessibility. Improving your credit file before applying, even modestly, often changes the offers you see.

Typical requirements include business and personal tax returns, recent bank statements, a profit and loss statement, a business plan for larger loans like SBA, and proof of business registration. The exact list depends on the lender and loan size — our free funding kit includes a checklist you can prepare in advance.

SBA 7(a) is the general-purpose program, usable for working capital, equipment, refinancing and more, with a maximum around $5 million. SBA 504 is specifically for major fixed assets like real estate or heavy equipment and structures the loan through a certified development company alongside a bank. Our SBA comparison guide covers eligibility and use cases for each.

No. Every figure, program name and lending rule on this site — including SBA programs, typical US credit thresholds and US lender categories — is specific to the United States. If you're researching business financing in another country, the loan categories will differ and you should consult a source built for that jurisdiction.

No. Nothing you enter into any calculator on this site is stored, sent anywhere, or shared with a lender — it's a private estimate that runs entirely in your browser. Running these numbers has no connection to any credit check or loan application.