If you’re considering a small business loan to grow your business, you can expect that you’ll need to meet minimum requirements when it comes to your business and personal credit history, the age of your business, and more. But revenue is also a major piece of the puzzle.
When applying for funding, though, lenders will take a more detailed look at your finances. Here’s what to expect.
Before you apply for a loan, find out if you meet the lender’s requirements, including annual revenue. To find your gross revenue, calculate your total income, including gross sales and any other money your business brings in, like rent and other income streams, for the year.
The criteria will vary by lender. Focusing on lenders whose requirements you meet will save you a lot of time and boost your chances of getting approved.
Here are some examples of how revenue minimums can vary by lender and loan type:
- For a medium- or long-term bank loan (1 year or longer), for example, you might be required to have $100,000 in annual revenue for an unsecured loan of no more than $100,000. But the same lender may require a minimum of $250,000 in revenue for a secured loan with a minimum loan amount of $250,000. Minimum revenue requirements can vary greatly from lender to lender.
- For SBA loans, your revenue can’t be higher than the SBA’s definition of a small business, which varies by industry (this SBA chart can help). From there, the minimum revenue may be set by the lender. So one lender might require at least $50,000 in annual revenue, while another lender might require $180,000 and up
- If you want short-term business funding, for example, QuickBooks Capital requires at least $50,000 in annual revenue.