To apply for a business loan, you’ll need financial documents that prove your revenue and profitability, legal documents that verify your business structure, a credit score that meets the lender’s minimum threshold, and in most cases, some form of collateral or a personal guarantee. The exact requirements vary by lender and loan type, but nearly every application follows the same core framework. Here’s what to prepare before you apply.
Credit Score Minimums
Your personal credit score is the first thing most lenders check, and the minimum they’ll accept depends on the type of lender and loan product. Traditional bank loans and SBA loans typically require scores in the mid-to-upper 600s. Online lenders set the bar lower: OnDeck requires a 625, Fundbox accepts scores as low as 600, and some revenue-based financing products go as low as 575.
Many lenders also pull your business credit score if your company has one. If you’ve been operating under an EIN and have trade lines or vendor accounts that report to business credit bureaus, that history works in your favor. But for small businesses, especially newer ones, the owner’s personal score carries the most weight.
A higher score doesn’t just improve your approval odds. It directly affects your interest rate and terms. If your score is borderline, spending a few months paying down personal debt or correcting errors on your credit report before applying can save you thousands over the life of the loan.
Revenue and Time in Business
Lenders want to see that your business generates enough cash to cover loan payments comfortably. Many require at least $100,000 in annual revenue, though the threshold varies widely. Some online lenders work with businesses earning as little as $30,000 per year, while others set the floor at $250,000 for their standard term loans.
Time in business matters just as much. Most conventional lenders want at least one to two years of operating history. A few online platforms will consider businesses as young as three to six months old, but those loans come with higher interest rates and shorter repayment terms to offset the risk.
If your business is brand new, your options narrow significantly. SBA 7(a) loans are available to startups, but you’ll need to demonstrate creditworthiness and a reasonable ability to repay. In practice, that means a strong personal credit history, a detailed business plan with financial projections, and often a personal investment or down payment that shows you have skin in the game.
Financial Documents
This is the heaviest part of the application. Lenders use your financial records to verify your revenue claims, assess your cash flow, and determine whether you can handle debt payments on top of your existing obligations. Gather these before you start the application:
- Business bank statements: Typically the most recent 3 to 12 months. Lenders look at your average daily balances, deposit frequency, and whether your account regularly dips close to zero.
- Personal and business tax returns: Most lenders ask for the last two to three years. These confirm your reported income and help verify that your bank statements align with what you’ve told the IRS.
- Income statement (profit and loss): A summary of your revenue, expenses, and net profit over a specific period. If you use accounting software, you can usually generate this in minutes.
- Balance sheet: A snapshot of what your business owns (assets) and what it owes (liabilities). Some lenders want both a current balance sheet and a projected one.
- Cash flow statement: Shows money moving in and out of your business over time. Lenders care about this because profitable businesses can still fail if they run out of cash between receivables.
- Schedule of business debts: A list of every existing loan, line of credit, or obligation your business carries, including the lender name, balance, monthly payment, and interest rate.
- Accounts receivable list: If your business invoices clients, lenders may ask for a current list of outstanding invoices. This helps them gauge how much money is owed to you and how reliably your customers pay.
Online lenders tend to ask for less paperwork than banks. Some will approve loans based on bank statements and tax returns alone. Traditional banks and SBA lenders typically want the full list above, and sometimes more.
Legal and Business Documents
Beyond financials, lenders need to verify that your business is real, legally registered, and properly structured. The specific documents depend on your business type, but here’s what to have ready:
- Employer Identification Number (EIN): Your business’s tax ID, issued by the IRS. If you’re a sole proprietor without employees, some lenders accept your Social Security number instead, but having an EIN is standard.
- Articles of incorporation or organization: The formation document you filed with your state when you created your LLC, corporation, or other entity.
- Operating agreement or bylaws: If your business is an LLC, the operating agreement outlines ownership percentages and management structure. Corporations use bylaws for the same purpose.
- Business licenses and permits: Any licenses required to operate legally in your industry and location.
- Commercial lease agreement: If you rent your business space, lenders may want a copy of your lease to understand your fixed monthly obligations.
- Franchise agreement: Required if your business operates as a franchise.
- Third-party contracts: Some lenders ask to see contracts between your company and major clients or vendors, especially if a large portion of your revenue comes from a few key relationships.
Collateral and Personal Guarantees
Most business loans require some form of security. Collateral is a business asset the lender can seize if you default. Common types include commercial real estate, equipment, inventory, and accounts receivable. The value of your collateral affects how much you can borrow and at what rate.
Even when a loan is technically “unsecured,” meaning no specific asset is pledged, the lender will often require a personal guarantee. This is a legal commitment that you, the business owner, will repay the debt personally if the business can’t. It puts your personal assets, including your home and savings, on the line.
A few alternative lenders offer revenue-based loans with no personal guarantee for businesses that meet specific annual revenue and time-in-business thresholds. These products tend to carry higher costs, but they keep your personal finances separate from the business debt.
SBA Loan Requirements
SBA loans are partially guaranteed by the U.S. Small Business Administration, which reduces the lender’s risk and typically results in lower interest rates and longer repayment terms for borrowers. The most common program, the 7(a) loan, has its own eligibility rules on top of whatever the individual lender requires.
Your business must operate for profit, be located in the U.S., and qualify as “small” under SBA size standards, which vary by industry based on revenue or employee count. You also need to demonstrate that you couldn’t get comparable financing through other non-government sources. The SBA won’t back a loan if a conventional lender would have approved you on similar terms.
The specific documents you’ll need for an SBA application depend on the loan size and how the lender processes the application. Your lender will guide you through their checklist, but expect to provide everything listed in the financial and legal sections above, plus a personal financial statement that details your individual assets, liabilities, and net worth. The process takes longer than online lending, often several weeks to a few months, but the terms are generally more favorable.
How to Strengthen Your Application
Before you submit anything, review your bank statements and tax returns for consistency. If your tax returns show $150,000 in revenue but your bank deposits add up to $90,000, the lender will have questions. Discrepancies slow down approvals and raise red flags.
Pay down existing debts if you can. Lenders calculate a ratio called debt service coverage, which compares your income to your total debt payments. The higher your income relative to your obligations, the more comfortable a lender feels extending new credit.
If your business is newer or your financials are thin, prepare a business plan that includes realistic revenue projections, a clear explanation of how you’ll use the loan proceeds, and a repayment strategy. Not every lender requires a formal plan, but having one signals that you’ve thought through the investment and aren’t borrowing on impulse.
Finally, apply with more than one lender. Rates, fees, and approval criteria vary significantly across banks, credit unions, and online platforms. Getting multiple offers gives you leverage to negotiate and ensures you’re not leaving money on the table.