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What lenders look at before they approve you
Every lender weighs the same handful of factors. They differ in how much weight each one gets, which is why a no from one product is not a no from all of them.
WithFunded Academy · Lesson 6 of 16 · 3 min read · Updated November 2026
Key takeaways
- Lenders check revenue, time in business, credit, cash flow, collateral, and what the money is for.
- Different products weigh these differently, so a weak spot points you to a product, not to a dead end.
- In the latest Federal Reserve survey, 42% of applicants received the full amount they sought.
- Checking your options through WithFunded is a soft inquiry and does not affect your credit score.
The six factors
1. Revenue and how steady it is
Lenders read your business bank statements to see how much comes in each month and how much it swings. Steady deposits matter as much as large ones.
2. Time in business
The longer your track record, the more products open up. Bank and SBA lenders generally look for two or more years. Faster online products accept younger businesses at a higher price.
3. Credit
For most small businesses the owner's personal credit is checked alongside any business credit file. Better credit lowers your rate and raises your limit. See how to build business credit.
4. Cash flow and existing debt
Can the business carry a new payment on top of what it already owes? This is the coverage ratio. Low average balances, overdrafts, and several existing advances all weigh against you.
5. Collateral
Equipment, real estate, or invoices that secure the financing lower the lender's risk and usually your cost.
6. Industry and use of funds
A clear, specific purpose with a number attached reads better than a general request. Some lenders also price certain industries differently.
What approval actually looks like
In the latest Federal Reserve Small Business Credit Survey, 42% of applicants received the full amount they sought, 36% received part of it, and 22% received none. Partial approval is common, so know the smallest amount that still gets the job done.
If one factor is weak
| Weak spot | Products that lean on something else |
|---|---|
| Thin or damaged credit | Invoice factoring leans on your customers' credit. Equipment financing leans on the asset. Working capital leans on recent revenue. |
| Under two years in business | Online lines of credit and term loans, equipment financing, and working capital |
| Uneven revenue | A line of credit you draw on only when needed |
| No collateral | Unsecured term loans and lines of credit, priced for the added risk |
The flexible options generally cost more. They can be a bridge while you strengthen the weak factor and qualify for cheaper money next time.
Soft and hard credit inquiries
A soft inquiry lets you see options without affecting your credit score. A hard inquiry is recorded on your report and typically happens only when you make a formal application with a lender you have chosen. Checking your options through WithFunded uses a soft inquiry.
Common questions
- What credit score do I need for a business loan?
- It depends on the product. Bank and SBA loans generally expect stronger credit. Products secured by equipment or invoices, and working capital based on recent revenue, are more flexible on credit and cost more.
- How long do I need to be in business to get financing?
- Bank and SBA lenders generally look for two or more years. Many online products accept businesses with a shorter history, usually at a higher price.
- Does checking my options hurt my credit?
- Checking options through WithFunded is a soft inquiry with no impact on your credit score. A hard inquiry generally happens only at formal application with a lender you choose.
See what your business qualifies for
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Rate inputs are as of November 2026: a representative 8%–30% APR band for non-bank term financing and a 7.00% prime rate. Worked examples are WithFunded calculations.
Educational content. WithFunded Academy lessons are general information for small-business owners. They are not financial, legal, or tax advice, and they are not an offer or a commitment to lend. Figures are representative examples and WithFunded calculations, not quotes. WithFunded and Big Think Capital are a financing marketplace; we are not the direct lender and do not guarantee funding, approval, rates, or terms. Actual rates, fees, payments, and terms are set by the funding lender and depend on your business, credit, and the product. Where required by state law, the lender provides cost-of-financing disclosures before any agreement is signed.