What Lenders Look For in Applications

1. Time in business

Measured from the date you started receiving customer revenue, not the date you registered the LLC. The cliffs that matter: 6 months (most working capital products unlock), 12 months (lines of credit, non-bank term loans), 24 months (bank term loans, SBA). See what you need before applying for business funding if you're still building toward month 6.

2. Average monthly revenue

Calculated from bank deposits, not stated revenue. Lenders typically look at 3-6 month averages. Most working capital products require $10k+/month; non-bank term loans want $25k+/month; bank-tier products want $50k+/month.

3. Owner FICO

The personal FICO of the primary guarantor is the gating score for most products. Tiers that matter:

• 500-579: working capital and equipment financing only; pricing is highest tier
• 580-619: more working capital options open up
• 620-679: non-bank term loans and lines of credit accessible
• 680-719: bank-tier products start to qualify
• 720+: best pricing in every category

4. Debt service coverage ratio (DSCR)

Existing debt payments as a percentage of net income or net cash flow. Lenders typically want DSCR of 1.25× or better — meaning $1 of net cash flow for every $0.80 of debt service. If your existing debits already eat 70-80% of net cash flow, new financing is unlikely to be approved.

5. Industry / NAICS code

Some industries are restricted or surcharged: cannabis, adult, gambling, firearms, debt collection, some construction subcontractors. Other industries get preferred pricing: medical, legal, professional services, B2B with strong receivables. Industry isn't a fixed disqualifier, but it shifts pricing meaningfully.

• Customer concentration: any one customer >25% of revenue raises risk
• Geographic concentration: single-location businesses in declining areas get downgraded
• Bank balance trends: trending up over the last 3 months is a positive signal
• Existing debt mix: a clean balance sheet with no MCAs scores better than the same business with two stacked advances
• Use of proceeds: "working capital" is fine but "specific equipment purchase" or "to take advantage of supplier discount" reads better when financials are borderline
• Owner's industry experience: 10 years in the field weighs more than a 1-year pivot from another industry

Different lenders weight these factors differently and almost none publish their exact scorecards. As a directional guide to which factors do most of the work for each product:

• MCA / working capital: bank deposit consistency dominates, then owner FICO, then time in business. Tax returns and full financials usually aren't required.
• Non-bank term loan: owner FICO and time in business are the gating factors, with revenue and existing debt service shaping the offer size and pricing.
• Line of credit: owner FICO and existing debt service do most of the lifting, with time in business and revenue setting the credit limit.
• Bank term loan: full financials (P&L, balance sheet, tax returns) drive the decision, with FICO, debt service coverage, and collateral all material.
• SBA 7(a): as of March 2026 the SBA no longer mandates a FICO SBSS threshold for Small Loans — lenders apply their own scoring models (many still weight SBSS informally), with cash flow projections and collateral quality shaping approval and structure.
• SBA 504 (real estate): the SBA 504 program adds a CDC (Certified Development Company) as the secondary lender — collateral quality and occupancy requirements are additional underwriting signals.