Securing business funding is one of the biggest challenges entrepreneurs face, especially in the evolving U.S. financial landscape. Whether you’re applying for SBA loans, business lines of credit, merchant cash advances, or equipment financing, lenders follow very specific criteria when evaluating applications.
This comprehensive guide breaks down what lenders look for — and how to position your business for approval.
1. Lender Priority #1: Personal Credit Profile
Before your business credit matters, lenders evaluate your personal credit.
Key Items They Review:
- Payment history
- Credit utilization
- Derogatory marks
- Number of inquiries
- Length of credit history
For SBA loans, most lenders prefer a minimum FICO of 620–650.
2. Lender Priority #2: Business Credit Profile
A strong business credit profile includes:
- EIN
- DUNS Number
- Business bank account
- Business address (not a home address)
- At least 3–5 Net-30 vendor accounts
- On-time payment history
Business credit is separate from personal credit and is essential for long-term growth.
3. Lender Priority #3: Revenue & Cash Flow
Most lenders analyze:
- Average monthly revenue
- Business bank statements (3–12 months)
- Number of deposits
- Cash balance
- Overdraft frequency
For alternative lenders, revenue requirements range from $5k–$15k/month.
4. Lender Priority #4: Business Age
Funding is easier when you’ve been operational for at least:
- 3–6 months for merchant funding
- 1 year for lines of credit
- 2 years for SBA loans
5. Lender Priority #5: Documentation
Typical documents include:
- Articles of Organization
- Operating Agreement
- EIN confirmation
- Tax returns
- Profit & loss statements
- Voided business check
Incomplete documents are one of the top reasons for denial.
6. Types of Funding Available
Business Line of Credit
Revolving access to capital.
SBA Loans
Best interest rates but strict requirements.
Term Loans
Predictable monthly payments.
Equipment Financing
Asset-backed loans.
Invoice Factoring
Lenders purchase your unpaid invoices.
Merchant Cash Advances
Fast approval but high cost.
7. Why Businesses Get Denied
Top reasons:
- Low credit score
- Insufficient revenue
- Too many overdrafts
- Incomplete paperwork
- High-risk industry
Conclusion
Funding is not as mysterious as many believe. When you understand exactly what lenders want — and prepare properly — your approval odds increase dramatically.
Need Help Securing Funding?
Hopewell Financial Services helps business owners prepare funding-ready applications, improve credit profiles, and connect with qualified lenders.
