Small-business lending tightened after the 2024 rate cycle and has only partially loosened in 2026. Knowing what underwriters want before you apply saves you weeks and protects your credit.
The core requirements
- Time in business: most online lenders want 6-12 months; SBA and bank lenders want 2+ years.
- Annual revenue: $100,000+ for online lenders, $250,000+ for banks, $500,000+ for SBA 7(a).
- Personal credit score: 600+ for online lenders, 680+ for SBA, 720+ for the best bank rates.
- Business credit: a D-U-N-S number with at least 3 reported trade lines is increasingly required.
- Debt service coverage ratio (DSCR): net operating income at least 1.25x the new loan payment.
Documents underwriters always ask for
- 3-6 months of business bank statements.
- 2 years of business tax returns (and personal returns for owners with 20%+ stake).
- Year-to-date profit & loss and balance sheet.
- A government ID and articles of incorporation.
- A personal guarantee — almost universal for businesses under $5M in revenue.
Match the product to the need
- SBA 7(a) — best rates, longest terms, slowest funding (30-90 days). Use for acquisitions, real estate, large equipment.
- Term loan (online) — funds in 1-7 days, 12-60 month terms. Use for one-time expansion costs.
- Line of credit — revolving, pay interest only on draws. Use for working capital and seasonal cash flow.
- Equipment financing — the equipment itself is collateral, so credit requirements are lower. Funds 1-5 days.
- Invoice factoring / MCA — fast and flexible but expensive (factor rates 1.1-1.5x). Use only when other options aren't available.
Red flags that kill applications
- Negative balance days on bank statements.
- High percentage of revenue from a single customer.
- Multiple NSF fees in the last 90 days.
- Existing MCAs (most lenders won't fund on top of one).
- Recent tax liens or unresolved judgments.
Clean up the bank statements for 90 days before you apply — it's the single highest-leverage change you can make.