Have a personal credit score around 650 and need business capital? Online loans, term loans and working-capital products may use lower credit benchmarks than traditional bank lines of credit.
Actively buying a business and expecting to need financing? Prepare your credit, revenue, banking, debt, ownership and use-of-funds information before lender conversations begin.
No business revenue yet? The funding source says some business credit card issuers may consider startups with strong personal credit, while SBA Microloans may also be available to qualifying startups with a business plan and repayment ability.
Strong revenue does not erase existing debt. Funding providers commonly review current obligations, cash flow and debt-service capacity before extending additional business capital.
Purchasing commercial real estate, large equipment or other long-term fixed assets? SBA 504 financing is specifically designed for these uses and commonly involves demonstrated repayment ability and a 10–20% down payment.
Need capital for expansion and have at least one year in business? Term loans commonly look for 600–680+ credit, $100K+ annual revenue and positive cash flow.
Operating for 6–12 months with consistent deposits and $50K+ annual revenue? Online and working-capital lenders may use different qualification standards than traditional banks.
Need financing to buy a business? Before approaching a lender, know your credit score, annual revenue, time in business, cash flow, existing debt, banking relationship and exact use of funds.
Investors need to understand who owns the startup before they invest. An inaccurate cap table, undocumented founder equity, unclear option grants, old SAFEs or notes, and missing corporate records can delay diligence and complicate a financing round.
A business loan may be issued to the company while still requiring an owner to personally guarantee repayment. Before signing, owners should understand the scope, duration, collateral implications, default provisions, release conditions, and how a guarantee could affect future financing or a business sale.
