$400K is SBA 7(a) territory and accessible to strong mid-market businesses via term loans. Lenders expect 680+ FICO, 2+ years in business, $120Kâ$160K/month revenue, profitable tax returns, and a DSCR above 1.25x. Full documentation is required at this size.
$400,000 is a meaningful commercial loan size that triggers full underwriting at most lenders. SBA 7(a) loans are the most common path: government-guaranteed, up to $5M, with competitive rates and terms up to 10 years for working capital or 25 years for real estate. Conventional bank term loans at this size are available to businesses with strong financials and banking relationships. Non-bank commercial lenders can fund faster but at higher cost.
SBA 7(a) loans are the benchmark product at this size: rates set at Prime + 2.75% or better (depending on term), terms up to 10 years working capital or 25 years real estate, fully amortizing. Conventional bank term loans offer comparable rates with faster processing for existing bank customers but without the government guarantee. Non-bank commercial lenders provide $400K in 5â15 business days with simplified documentation, at higher cost (factor rates or APRs of 25â60%). Equipment financing at this size requires substantial equipment collateral and terms of 3â10 years.
At $400K, debt service coverage ratio (DSCR) becomes a primary underwriting gate. Lenders want DSCR of 1.25x or higher â meaning the business generates $1.25 in net operating income for every $1.00 of debt payment. Typical floors: 680+ FICO (700+ for SBA), 2+ years in business, 2 years of business tax returns, 3â6 months of bank statements showing $120,000â$160,000/month in revenue. Collateral (real estate, equipment, business assets) strengthens applications. Personal guarantee from all owners with 20%+ stake is standard.
ClearValue Lending matches $400K loan requests to the right lender â SBA 7(a) channel, bank-tier term loan, or non-bank commercial lender â based on your financials and business profile. One application, one routing decision