How to get a business loan

How do business loans work?

A business loan gives your company money now in exchange for repaying it with interest or a fee over a set period. Depending on the product you repay monthly over years (term loans, SBA loans), draw and repay as needed (a line of credit), or pay daily or weekly from sales (cash advances and revenue based financing).

Most loans under $500,000 also carry a personal guarantee, so you are personally responsible if the business cannot pay. Lenders fall into three groups: banks (cheapest, slowest, strictest), SBA lenders (cheap, slow, flexible on collateral), and online lenders (fast, looser, more expensive).

What do lenders check?

Lenders check four things first: time in business, revenue, cash flow and credit. Banks typically want two years in business, $250,000 or more in annual revenue, a personal credit score above 680, and cash flow that covers the new payment with room to spare (a DSCR of 1.25 or more). Online lenders go lower: six months to a year in business, $10,000 a month in revenue, and a score around 600.

After those, they look at your industry, existing debt, overdrafts on your bank statements, tax liens and judgments. The full list is in business loan requirements.

How much can I borrow?

Most lenders lend a multiple of your revenue or cash flow. Online term loans and lines typically cap at 10% to 20% of annual revenue. Cash advances typically offer 50% to 150% of one month's deposits. Banks and SBA lenders size the loan on cash flow: the payment must fit under your income with a cushion, so $150,000 of annual cash flow might support $400,000 to $600,000 of ten year SBA debt.

Collateral extends the limit for real estate and equipment loans, where lenders typically advance 70% to 90% of the asset's value. Run your numbers in how much can I borrow first.

Which type should I apply for?

Match the product to the purpose and the timeline. One planned purchase with a known cost fits a term loan or an SBA 7(a) loan. Ongoing gaps between paying suppliers and getting paid fit a line of credit or invoice factoring. Buying a machine or vehicle fits equipment financing, where the asset is the collateral.

If you need money this week and have steady deposits, a cash advance will fund fastest, but it is the most expensive option and should be the last one you consider. The table below compares the main choices.

What documents do I need?

For anything under $150,000 from an online lender you usually need three to six months of business bank statements and a government ID. For larger loans, banks and SBA lenders add two years of business and personal tax returns, a year to date profit and loss statement and balance sheet, a debt schedule, aging reports, and your formation documents. Equipment and real estate loans add the quote or purchase agreement.

Gather these before you apply; a complete file is the biggest thing you control for speed. The document checklist covers every item, and what you need to apply shows what this site asks for.

How long does it take?

Typical funding times run from one day to three months depending on the product. Cash advances and revenue based financing typically fund in one to three days. Online term loans and lines take one to seven days. Bank term loans take two to eight weeks. SBA 7(a) loans take 30 to 90 days, and SBA 504 and commercial real estate loans take 45 to 120 days because of appraisals and legal work.

The clock usually stops for one reason: missing documents. Answer requests the same day and most timelines land at the short end. See how long a business loan takes.

What if I am declined?

A decline from one lender is not a decline from all of them. Banks say no most often for time in business under two years, credit under 680 and thin cash flow. Those same files are routinely approved by SBA lenders, online lenders or asset based lenders at a higher price.

Ask the lender for the reason, fix what can be fixed (pay down a card, clear a tax lien, stop overdrafts for three months), and apply to lenders whose criteria match your file. Why loans get denied lists the real reasons and the fix for each, and the bank said no covers what to do next.

How do I apply once and reach every matching lender?

You can fill one application on this site and it is matched to lenders in every category, so you do not repeat the form ten times. It is free for your business. Lenders pay us when a loan funds, and we are paid the same whichever lender you pick.

If you would rather not do the paperwork, ask Claude, ChatGPT, Gemini or Grok to apply for you through our MCP server: your assistant reads your documents, fills the application, checks what is missing and submits with your approval. See applying with an AI assistant.