Fundera: The Minimum Criteria Your Business Needs to Qualify for Each Type of Small Business Loan pg.

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 If you’ve ever searched for business loans on the Internet before, you know
searching “small business funding” can easily turn into a chase down a rabbit hole.

You’ll track down so many different types of loans, and then quickly realize that all
lenders have different requirements. A loan that might seem perfect for you may
require profitability, while another wants you to have been in business for more
than two years. It can be maddening!

Today we’re cutting through all the confusion. This guide provides the absolute
minimums your business needs to potentially qualify for every type of business
loan in an easy-to-skim format.

Fundera: The Minimum Criteria Your Business Needs to Qualify for Each Type of Small Business Loan pg. 2
 What Lenders are Looking For

The criteria includes:

• Minimum Years in Business
• Minimum Revenue
• Minimum FICO Score – Do these loans require stellar personal credit?
• Profitability – Does the loan require your business to be profitable?
• Bankruptcy – Could you qualify even if you’ve previously filed bankruptcy?
• Credit Card Volume – Some types of alternative loans rely on credit card
volume in your business, as this is how the loan will be repaid.
• Accounts Receivable – Some types of alternative loans factor your
accounts receivable value into the mix.
• Existing Debt – Do you currently have a loan balance with another lender?
Will this new lender be willing to take a second position behind the other
lender, or want to refinance that outstanding amount? This can be a risky
prospect for lenders because they may have a lower chance of recouping
any losses should your business go under or declare bankruptcy.

Fundera: The Minimum Criteria Your Business Needs to Qualify for Each Type of Small Business Loan pg. 3
 Minimum Requirements Needed for Each
Small Business Loan

This list includes minimum requirements for anything from traditional small
business loans to loan products you may have never even heard of!

Small Business Administration 7(a) Loan

As an arm of the United States Government, the SBA’s purpose is to help drive the
economy by giving small business owners – arguably the backbone of America’s
economy – access to the capital they need to grow.

Through an SBA-guaranteed loan, you can borrow money for a variety of business
purposes, including adding to working capital, purchasing inventory or equipment,
refinancing other debts, buying real estate, or even financing the acquisition of
other businesses.

Minimum Criteria to Receive a Small Business Administration Loan

Years in Business Required: 2+

Revenue: $50,000

Credit Score: 640+

Profitability required? No.

Yes, you could qualify for an SBA loan no

Bankruptcy allowed?
less than 3 years after filing bankruptcy.

Credit Card volume a factor? No.

Accounts Receivable a factor? No.

No, the SBA will not take second position

Second position allowed?
to another lender.

Fundera: The Minimum Criteria Your Business Needs to Qualify for Each Type of Small Business Loan pg. 4
 Short-Term Loan
Short-term loans exist to provide small business owners with access to working
capital you might need quickly in order to maintain or grow your business. For
example, you might need short-term capital to buy the supplies to fill a customer
order. Or perhaps your business is seasonal and you need to hire help at certain
times of the year.

Short-term loans are unlike more traditional business loans in that they are
generally for less money, have drastically shorter repayment periods, and you often
find you’ll pay the lender back daily rather than monthly.

Minimum Criteria to Receive a Short-Term Loan

Years in Business Required: 6 months +

Revenue: $65,000+

Credit Score: 500+

Profitability required? No.

Yes, you could qualify for a short-term loan

Bankruptcy allowed?
no less than 1 year after filing bankruptcy.

Credit Card volume a factor? In some cases. If so, $3,000+.

Accounts Receivable a factor? No.

Second position allowed? In some cases.

Fundera: The Minimum Criteria Your Business Needs to Qualify for Each Type of Small Business Loan pg. 5
 Medium-Term Loan
Like short-term loans, medium-term loans are for a fixed amount and you pay them
back on a fixed schedule over a fixed period of time.

Unlike short-term loans, though, they may be for more money and repaid over
longer terms.

Minimum Criteria to Receive a Medium-Term Loan

Years in Business Required: 1+

$150,000+ in most cases. 1 lender will

Revenue:
consider $25,000+.

Credit Score: 600+

Profitability required? No.

Yes, you could qualify for a medium-

Bankruptcy allowed? term loan no less than 2 years after filing
bankruptcy.

Credit Card volume a factor? No.

Accounts Receivable a factor? No.

Second position allowed? In some cases.

Fundera: The Minimum Criteria Your Business Needs to Qualify for Each Type of Small Business Loan pg. 6
 Equipment Loan
Most businesses need some sort of equipment to function.

If you’ve ever had a car loan, you’ve essentially had an equipment loan. The
equipment you are purchasing – anything from computers to heavy machinery – is
the collateral and you’ll pay back the loan at a fixed monthly rate for a fixed amount
of time. Interest rates on equipment loans generally vary between 8% and 30%.

Minimum Criteria to Receive an Equipment Loan

Years in Business Required: 1+

Revenue: $75,000+

Credit Score: 600+

Profitability required? No.

Yes, you could qualify for an equipment

Bankruptcy allowed? loan no less than 2 years after filing
bankruptcy.

Credit Card volume a factor? No.

Accounts Receivable a factor? No.

Second position allowed? In some cases.

Fundera: The Minimum Criteria Your Business Needs to Qualify for Each Type of Small Business Loan pg. 7
 Line of Credit
Lines of credit are one of the most versatile types of credit in the business world.
They are simply an open account with a lender that features a fixed amount of
credit you can draw on at any time. Lines of credit have many advantages, namely
that once you have one in place it is readily available for short-term cash flow
needs, and that you only pay interest on the amount that you actually use.

Minimum Criteria to Receive a Line of Credit

Years in Business Required: 1+

Revenue: $200,000+

Credit Score: 600+

Profitability required? Yes.

Yes, you could qualify for a line of credit no

Bankruptcy allowed?
less than 2 years after filing bankruptcy.

Credit Card volume a factor? No.

Accounts Receivable a factor? Yes.

Second position allowed? In some cases.

Fundera: The Minimum Criteria Your Business Needs to Qualify for Each Type of Small Business Loan pg. 8
 Invoice Financing
Do you find yourself watching your mailbox or inbox for customer payments?
Waiting for the cash to flow into your business can be frustrating, but invoice
financing (aka “accounts receivable financing”) offers a short-term solution as you
await your customers’ payments.

The company who administers an invoice cash advance will advance you about 85%
of the total loan value, and then hold 15% in reserve. From this reserve amount, the
company will collect their fees, which is typically based on the amount of time it
takes your customer to pay you back, as well as a flat processing fee (around 3%).
You’ll receive the reserve amount, minus fees, once the invoice is paid.

Minimum Criteria to Receive Invoice Financing

Years in Business Required: 6 months+

Revenue: $50,000+

Credit Score: 500+

Profitability required? No.

Yes, you could qualify for an invoice loan

Bankruptcy allowed?
despite having filed bankruptcy.

Credit Card volume a factor? No.

Accounts Receivable a factor? Yes.

Second position allowed? Yes.

Fundera: The Minimum Criteria Your Business Needs to Qualify for Each Type of Small Business Loan pg. 9
 Merchant Cash Advance
A merchant cash advance is a great form of funding when your business simply
needs a quick cash boost. It requires relatively little paperwork and the cash can be
in your hands in just one or two days.

Merchant cash advances are paid back a little differently than other types of
business financing. Your lender will take a portion of your credit card sales each
day until the entire amount, plus interest and fees, has been repaid. The higher the
percentage of credit card sales they take, the shorter the repayment term will be.

Minimum Criteria to Receive a Merchant Cash Advance

Years in Business Required: 5 months+

Revenue: $75,000+

Credit Score: 400+

Profitability required? No.

Yes, you could qualify for a merchant cash

Bankruptcy allowed? advance no less than 1 year after filing
bankruptcy.

Credit Card volume a factor? Yes. $4,500+.

Accounts Receivable a factor? No.

Second position allowed? In some cases.

Fundera: The Minimum Criteria Your Business Needs to Qualify for Each Type of Small Business Loan pg. 10
 Startup Loan
Startup loans are a great way to get funding for a new business venture. Depending
on your new business’s needs, these loans generally consist of either a line of credit
or an equipment loan.

A startup line of credit, which can be interest free for 9-15 months, is a great way
to get your business off the ground without being saddled with interest payments
right away. You will need near perfect credit, though.

Equipment loans can also be a great way to get started. Since the equipment you
are buying serves as collateral, credit requirements will be slightly less stringent,
though you’ll still need a good credit score. Interest rates are also relatively low,
making this a good option for when you’re just starting out on your own.

Minimum Criteria to Receive a Startup Loan

Years in Business Required: 0+

Revenue: 0+

Credit Score: 700+

Profitability required? No.

Yes, you could qualify for a startup loan no

Bankruptcy allowed?
less than 3 years after filing bankruptcy.

Credit Card volume a factor? No.

Accounts Receivable a factor? No.

Second position allowed? No.

Fundera: The Minimum Criteria Your Business Needs to Qualify for Each Type of Small Business Loan pg. 11
 Which loan is right for your business?

We hope this guide has given you a better understanding of the

different types of business loans available to you and which ones fit
your specific needs.

Ready to take the next step? Visit Fundera.com to apply for all the loan
options above.

Fundera: The Minimum Criteria Your Business Needs to Qualify for Each Type of Small Business Loan pg. 12